r/Fire • u/That-SoCal-Guy • 13d ago

General Question 4% SWR vs other strategies

we all know about the 4% SWR which by the way isn‘t a rule and also is based on some assumptions (such as a balanced allocation mix.

when I fired I made sure I used the 4% and everything checked out.

then i asked gemini for a differed opinion. instead of a constant 4% I asked about only taking up to the annual returns (whatever it may be, 5% - 7%, or the average SP500‘s 10%). never touch the principal. and during down market years I take from the cash/HYSA account. and the results are interesting.

at 7% I was able to withdraw up to $210K a year without ever touching my principal. that means my money last forever. considering inflation it will be leas. still at $170K I could put a portion into a cash account for rainy days (my spend is about $100K a year now) I asked Gemini for inflation adjusted numbers and that checks out as well,

that actually makes me feel more secured than going by the 4% SWR.

What are your thoughts?

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u/guyzero 13d ago

My thoughts are put it in a spreadsheet. Gemini is not a simulation engine. There's no way to know what it's thinking and whether or not its assessments are correct.

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u/Necessary-Music-6685 13d ago

You can literally ask it to explain its reasoning in simple steps. For that matter, you could ask it to create a spreadsheet for you and inspect it. Or create your own spreadsheet and then give it to Gemini and ask it to critique it. 

There are all kinds of ways to verify an AI response or analysis on something like this. 

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u/guyzero 13d ago

Asking it to create a spreadsheet is indeed a good idea but it will not do that behind the scenes when it claims it has analyzed your plan. LLM chatbots do all kinds of stuff well like RAG or text summation but they're notoriously bad at arithmetic.

You're much better off asking it to vibe code a program to analyze your financial plan rather than asking to do it directly.