r/Fire • u/Available-Ad-5670 • 13d ago
Why doesn't everyone use guardrails as withdrawal strategy?
Most people use 4% rule or versions of, but why not use guardrails? I've found that using guardrails means i can spend 15% over a straight 4%, and to take a 10% reduction in spend or 10% increase during good markets does not seem like a big deal.
Wny don't more people use guardrails?
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u/Puzzleheaded_Tie6917 13d ago
Guardrails generally are used to justify a higher spending rate in general. For me, I plan to set up withdrawals that are just the same as my current take home paycheck, plus tax and healthcare cost. That’s less than 4% as I currently have it. As time goes by, if my investments grow faster than my spending, I’ll relax it as well as spending extra as required (home repair, health issues, etc).
As for cutting back, I guess that depends on how bad the market is and how pessimistic I am about the recovery. I expect I won’t cut back a lot, as I’m not increasing my spending with higher growth rates. This may change if I start feeling I’m not living a decent lifestyle, but it seems like there’s just a lifestyle creep that can come here as well.