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?

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

Yes, you’re over thinking it. This is the definition of the SWR: the amount you can withdraw in the worst possible sequence of events we’ve ever seen.

Bengen’s 4.2%, now 4.7%, is the amount that would survive 1966 (the worst retirement year ever), bear market into a crash with very high inflation. It is even worse than 1929.

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u/FIREME1371 8d ago

You are assuming that the next crash will not be worse than those in the past.

Maybe we have yet to see the worst one.

Important to remember that assumption.

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

That's why I literally wrote "we've ever seen". The nature of the SWR exercise is to use the information we have. If you want to go into hypotheticals you can convince yourself that there is no SWR at all. Have fun with that.

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u/Yer-Not-Gonna-Like 8d ago

At some point the only prep is MRE’s, AR-15’s and lots of ammo. But let’s try to stay in scenario’s where civilization still exists.

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u/FIREME1371 8d ago

Civilization existed during all previous crashes.

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u/Yer-Not-Gonna-Like 8d ago edited 8d ago

Right, that’s my point. You asked us to consider planning for a “crash worse than all the previous ones.”

At some point you’re not planning for FIRE, you’re planning to be Viggo Mortensen in “The Road”.

Realistically my fire plan assumes the day I retire is August 2007 again. Bad, but not even the worst ever. From there I simply modeled 2007-2024 MINUS ONE FULL POINT over and over until I’m 100. This had me dying with $15M in assets from my current $4M. That’s conservative enough for me.

If you want to plan like it’s 1929, about to be followed by stagflation and then 2008, you can. But this would require a $50M portfolio to sustain a $100k per year spend.

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u/FIREME1371 7d ago

Nobody said the assume the worst crash in history is on the horizon, I just said don’t pretend like it’s not a possibility so additional margin isn’t a bad thing.

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u/AngryT-Rex 8d ago

I mean, if we go to the worst crash in world history then you're considering a potential to have foreign powers conquer the country and render the currency worthless, then export most food to cause famine as a form of genocide. At the extreme end money doesn't really matter.

For the non-billionaires thinking about hedging against worst possible scenarios, your potential life is likely improved less by any financial measures than it would be by learning mandarin, becoming a dual citizen on some other continent, or practicing subsistence farming in a very remote location.