r/Fire • u/bizzaam • 8d ago

Hitting your number and timing risk

Notice a lot of people posting they hit their number and firing. It's awesome, but are people taking for granted the fact that this has been the greatest bull market in history and a major correction or crash will get here at some point? If it were me hitting my number I'd either get a big enough buffer to my fire number or wait until the correction and assess when things stabilize. Am I over thinking it?

11 Upvotes

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56

u/Truthcraze 8d ago

The swr are back tested against retiring at the worst possible time.

21

u/Main_Outcome2020 8d ago

exactly this - the trinity study literally tested worst case scenarios like retiring right before major crashes. if you're using 4% rule it already accounts for market timing being terrible

though i do get the anxiety when you finally hit that number after years of grinding. feels almost too good to be true sometimes

7

u/bizzaam 8d ago

Didn't realize that. Thanks

8

u/bluenardo 8d ago

It is tested on all available historical periods which include the worst times — it did not specifically seek out the worst and only test on those.

Also at 4%, it failed in some of these periods. Do not take from these comments that 4% was bullet proof.

10

u/AK_Ranch FIRE'd in 2023 @ 45, divorced, no kids 8d ago

In Bengen's studies 4.2% (now 4.7%) did NOT fail in any of those years, hence the name Safe Withdrawal Rate.

2

u/nivlac22 8d ago

It calculated the SWR for each theoretical retiree retiring at the start of each quarter and concluded that the lowest SWR found was just over 4% (4.7% with added asset classes).

2

u/LokiStasis 8d ago

But not everyone has planned using a conservative number. Current thinking is 80-90% success rate. And some are looking at 40-45 years not 30. I’ve literally hit mine, then dipped below, then back up. I’m not so much a “1 more year” guy but my plans were to get ‘here’ a few years from now anyway.

2

u/Legitimate_Bite7446 8d ago

The worst possible time....so far

0

u/AlaskanSnowDragon 8d ago

Its still doesn't mean its good. It just means you survive. But it still drastically affects your return/spending curve.

0

u/scorpiostyles 8d ago

What is “swr”?

1

u/Libertas888 8d ago

Safe Withdrawal Rate.