How long will it take to get to FIRE?

[mrfeh]

Bengens follow up research found 4% to be SAFEMAX forever, and a bit over 4.5 % ad SAFEMAX for a 30 year period.

And there are other people that say 4% is too high for 30 years.

To each his own. I prefer to be on the cautious side, especially given current PE ratios.

 

[pb4uski]

What tools do you use to estimate the time it'll take you to FIRE? I've seen some online calculators but they are a little underwhelming (i.e. Networthify).
They assume a fixed return on investment and no asset allocation.

FIRECalc would be interesting to use given all the data embedded within, but it doesn't seem to be able to run in "when will I hit my magic number?" mode.

Does anyone have a go-to tool they use for projecting when they'll be able to pull the plug?

I used Quicken Lifetime Planner... included in Quicken Deluxe and higher versions. It is easy to use, fairly intuitive and covers a lot of bases. Also, you can then use Quicken to monitor your progress and updating your plan is easy peasy... just review the assumptions and you're done.

I also had my own Excel model using the same assumptions that I used in QLP, but that was more of adding suspenders on top of the QLP belt.

For planning purposes, I don't view a fixed return on investment as a fatal flaw in the accumulation phase and there in no real sequence of returns risk in accumulation. When it came time to retire, I supplemented my Quicken Lifetime Planner analysis with tools like Firecalc to assess my sequence of returns risk.

 

[Dtail]

And there are other people that say 4% is too high for 30 years.

To each his own. I prefer to be on the cautious side, especially given current PE ratios.

BIG ERN for one thinks it is too high, plus not sure if Bengen included taxes and fees in his follow up.

 

[firedata]

After thinking a bit more about this, I think the rate you ultimately will come to rely on depends on how much flexibility you have and how long you'll need to rely solely on your retirement funds (social security or paying off mortgages). I'm okay with 4% because we have a fair amount of flexibility.

Flexibility is having some moderate luxuries in our spending (like some travel or other non-essential spending). If the market tanks and and I see the danger of sequence of return risks, we can pretty easily lower our spending for a year or a few maybe 3.5%.

We have a rental so while at the beginning of ER, we are drawing 4% to cover our spending, over time rents will increase and eventually the mortgage will be paid off so over time, the cash flow from the rental will increase substantially and the withdrawal rate should go down. I'm projecting that by the time I'm 80, the net rental income could entirely cover our spending (however, it'll cover an increasing amount before then).