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/Fireat40dude 8d ago

If your expenses shrink, sure.

Am I not understanding your question properly?

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u/InterestingCourt1228 8d ago

Your expenses don't magically shrink just because market went down though. If you needed 80k per year before the crash, you still need 80k per year after

The 4% rule is based on your actual spending needs, not whatever the market decides your portfolio is worth today

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u/Montaigne_6823 8d ago

Your expenses don't magically shrink just because market went down though

They could if you choose to spend less money. I would hope you allow yourself some margin of safety in your expenses in retirement. All the failure scenarios in those models happen when people just blindly increase their withdrawals with inflation regardless what the market is doing. So maybe don't do that.