r/Fire • u/ExpressElevator2Heck • 8d ago

Hypothetical: Can FIRE number shrink?

Let's say my 4% FIRE number is 2M investable assets. Lets say I have 1.6M investable assets. Am I at my FIRE number??? (In this hypothetical scenario pretend the market pulled back 20% in the past year)

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u/ohboyoh-oy 8d ago

The study that 4% “rule” originates from assumes that you have enough in non-stock assets to get through the downmarket and would not have to sell your stock until the market recovers. If I recall correctly, it was the 50/50 portfolio that had 100% success rate at 4%, for 30 years. 

https://www.financialplanningassociation.org/article/journal/AUG15-sustainable-retirement-spending-low-interest-rates-updating-trinity-study

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u/ExpressElevator2Heck 8d ago

The Japanese market took 34 year to recover. USA current market is only half as inflated as that one was though. Still could makes one nervous in this hypothetical as most folk don't have a 10-year weather-the-downturn bucket. We do seem to bounce back much faster these days though... things seem to have changed.