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Sep 21, 2023

You seem to have some fundamental misunderstandings about the 4% rule. First, it uses 4% rather than 7%+ because draws go up with inflation, so you need to increase the portfolio size by 3%+ each year just to keep up.

Second, the 4% rule has about an 87% probability of success for 30 years. Extending the period to 35 or 40 years (let alone infinity) reduces that success likelihood.

You can see more here: https://medium.com/p/ec00e1676d6a

Opher Ganel
Opher Ganel

Written by Opher Ganel

Consultant | systems engineer | physicist | writer | avid reader | amateur photographer. I write about personal finance from an often contrarian point of view.

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