100/0 allocations, much less when CAPE is high like it is now). If you feel more comfortable with a more conservative asset allocation during accumulation, know that you can have that reduced volatility without too much extra time required, especially if you have a higher savings rate (the difference in medians is 1 year for a 60% SR and 60/40 v.
Again we noticed the importance of your savings rate. Later, we looked at one of the most popular metrics in personal finance: Net worth. While a 100% equity allocation results in the shortest time to FI on average, the difference is somewhat surprisingly not that big. Money Mustache’s shockingly simple math behind early retirement, we observed that your savings rate is the most important factor in retiring early. Don't be surprised if your FI date comes years earlier or later than you estimated deterministically. I highly recommend you read the article, but in case you don't want to, here are the main takeaways:Įven assuming constant income and expenses, the time to FI can vary significantly based on market performance, with larger effects for lower savings rates. It turns out that the market can have a significant impact on time to FI, which is further validation that it's important not to put too much weight on net worth/ FIRE date goals. Hardest to plan how much monthly money will be needed to cover expenses. The article doesn't address the optimal time to begin drawing SS. For the savings rate rule to hold true after 17 years, you should have 650k to start drawing down on in retirement.
ERN's post today ( ) evaluates the uncertainty in MMM's famous post about the Shockingly Simple Math behind early retirement. Pretty good info The 4 'Safe Withdrawal' rate is a good bit of info. Here’s the scenario, you have an income of 50K and invest 26k each year into a passive index fund that tracks just the NZX50 in scenario 1 and the S&P500 in scenario 2.
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