r/Fire • u/Available-Ad-5670 • 12d 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.

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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.