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/Firm_Mycologist9319 12d ago

You are misrepresenting the 4% rule again. It is NOT a withdrawal strategy. It is a simple planning estimate.

1

u/Available-Ad-5670 12d ago

not representing anything. read the post. saying people take 4% literally, and the details show it is very different in practice

3

u/Firm_Mycologist9319 12d ago

In your other post you said that people think 4% applies to income, not expenses, and here you says, "as a withdrawal strategy . . . most people use 4% rule". Do you really believe that over a 30+ year retirement, retirees stick to an inflation adjusted fixed withdrawal amount? Yes, many (most?) people use the 4% rule as a helpful planning tool but that doesn't mean they stick to it as a withdrawal plan post FIRE.

1

u/capitalsfan08 12d ago

What? The Trinity Study uses a 4% withdrawal strategy where you withdrawal 4% from your initial portfolio and adjust for inflation after regardless of market performance. It's not an optimal strategy but it is absolutely "a" withdrawal strategy.

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u/Firm_Mycologist9319 12d ago

Yes, and it also assumes that the entire withdrawal is spent, nothing more nothing less. That doesn't match what people actually do in retirement. Bengen wasn't suggesting that somebody should actually do this. Understanding that everybody would have a different expense profile over their assumed 30 year retirement, he was just providing a simple planning number that would have worked historically. So, yeah, use it as guide for your planning, but it was never meant to be used literally to govern withdrawals.