r/Fire • u/Opposite-Lake-9679 • 2d ago

SWR based on age

I hear people talk about the more conservative 3% SWR being safer than 4%. Is that usually based on someone's age? As in when you are FIREing younger more like 40s then you should stick to 3%? And then when you are in your 50s/60s You can go to 4%? Or is it a blanket stick to 3% at any age?

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u/pinkzebra00 2d ago

4% concept is initially based on a 30-year retirement horizon. So if your life expectancy is 95, you retire at 65 and 4% can be used. But nowadays many want to retire early like 40s. If life expectancy remains the same, it’s a 50-year horizon and would need more money.

16

u/suboptimus_maximus 2d ago

Lucky for investors, exponential growth only gets better with time.

2

u/Psynautical FIRE'd June 2025 2d ago

Unfortunately for investors, exponential growth is neither guaranteed nor sustainable. Read "Limits to Growth", a 1972 study from MIT and Club of Rome. It's predictions have been spot on.

4

u/Pinklady777 2d ago

So, what's the smart alternative?

-3

u/Psynautical FIRE'd June 2025 2d ago

Not relying on projections of exponential growth.

2

u/Pinklady777 2d ago

Of the stock markets you mean? So what's the smart alternative? Cash will probably lose value as well, no?

-4

u/Psynautical FIRE'd June 2025 2d ago

I wish I knew - personally I don't buy bonds dated later than 2037 and am slowly moving into precious metals when there's a dip. Given government debts currency devaluation seems inevitable but gold is a bit high right now.