intercst
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Most important I think is begin a regular savings program early. As you get raises etc make sure part of that goes into savings. And especially hands off those savings. Let them compound.
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Them Bogleheads be talking about you:
Retire Early Homepage Updated July 2025 - Bogleheads.org
I could have retired very early on the 4% rule in 2007, 18 years ago. I didn’t - another story - but I wonder how it would have gone if I had.
Our net worth was down 52% at the bottom in 2009 - that’s a pretty poor sequence early on. And our expenses have risen quite a lot - 3 kids, medical costs.
Are there any free sites where I can backtest? Portfoliovisualizer only goes back 10 years now.
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Are there any free sites where I can backtest? Portfoliovisualizer only goes back 10 years now.
These might be what you’re looking for.
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I wanted to back test my actual scenario. Though I note that using Firecalc, 60/40 portfolio, 4% withdrawal gets:
“For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 4 cycles failed, for a success rate of 96.8%.”
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This does what I wanted:
https://testfol.io/?s=jhA4ozKE0cx
IF the data is correct, using the nominal ending values:
60/40
2007-2025
4% inflated each year
Start $1m
Expenses $40k
End $1.8m
Expenses $62k (increased by inflation only)
Withdrawal rate this year 3.4%
About 40 years still to go. Looking good.
60% US, 20% International, 20% cash: gives this year withdrawal rate of 4.4%. This is about what our portfolio would have been in 2007. Still not bad.
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Additional comment: though I feel like we spend like drunken sailors, and I feel like our expenses have gone up more than inflation, if I tweak them a bit to account for ACA subsidies that we didn’t get, and maybe cut back on new cars, our actual average expenses have been about the 2007 level plus inflation.
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My spending after 30 years of FIRE (1994-2024) was just above the 1994 level WITHOUT an inflation adjustment for the same lifestyle. How is this possible?
- Focus on health care and health insurance price gouging. When I got diagnosed with a potentially deadly and expensive autoimmune disease in 1999, I did a deep dive into health care as a cost engineering project. (My professional specialty during my working years was examining what a contractor or vendor was charging the company, and determining where we were getting screwed.) I saved $300,000 to $400,000 over that period of time including the $100,000 windfall from Obamacare. Pro tip: Buy high deductible health plans, source high-cost, name brand drugs in Canada, and you can often pay cash for a service and get it a lot cheaper than what the insurance company will charge you.
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Excellent experience with automobiles. Prior to retiring, my policy was to buy a new car about every 10 years. After reading 'The Millionaire Next Door" in the late 1990’s, I started buying used vehicles. In Nov 2004, I bought a used 2005 Nissan Altima V-6 with 13,000 miles on the odometer for $17,500 (a new one, similarly equipped, would have been $25,000.) I then drove this vehicle for the next 20 years. Every time I got the “new car itch”, I’d ask myself, “What are the odds any of the vehicles you’d buy would be as reliable as what you have?” Answer, “Not good”. I replaced the Altima with a used 2020 Tesla Model Y in April for $21,000 (after the $4,000 used EV tax credit.) I fully expect the Tesla to be as reliable as the Toyotas and Nissans I;ve been driving for the past 40 years, with lower maintenance costs.I priced the Altima at $4,000 for a quick sale and sold it within 24 hours. ( I probably could have gotten $6,000 if I was willing to wait and market it more.) So I only lost an average of $675/yr to depreciation over my 20-year holding period – Minimizing the Skim.
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Rent vs. Buy One controversial strategy I’ve used over the past 40 years is to employ a rent vs. buy analysis to inform my housing choices. I’m only willing to own a home if I can purchase it at a price that has some prospect of giving me the unleveraged appreciation of the S&P 500.
The rent vs. buy calculation didn’t turn positive for me until 2012 when I was living in a Portland OR suburb at the tail end of the 2008 housing crisis and paid cash for a foreclosed home for 70% off its 2008 value. It’s since more than tripled in price. My out-of pocket housing costs in 2025 on a mortgage-free home (property taxes, HOA fee, insurance and maintenance) are less than what I was paying in rent in Houston back in 1994 for about a 1/3 smaller living area than I occupy today.
It also helps that Washington State has much lower property taxes than Texas and no state income tax.
- Long-Term Buy and Hold I manage my investment portfolio to reduce or eliminate “fees, commissions, trading costs and taxes”. I’m usually able to take all my income in the 0% bracket for qualified dividends and capital gains.
Of course, my current spending level doesn’t include me taking 3 or 4 ocean cruises per year or piloting a small aircraft around the Pacific Northwest as a hobby (I haven’t done that since the pandemic.) But If I develop a new interest in a $200,000 or $300,000/yr hobby I can afford it.
It’s not the money or wealth. The ultimate luxury in retirement is not having anything you HAVE to do, and not HAVING anyone you have to report to. (Obviously, I’m not married. {{ LOL }}
intercst
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I put together my own back tester with my portfolio performance and withdrawal rate. If I had retired in 2008 and started with the 4% SWR, my portfolio would now be $1,475,000 in 2024 with a 4.1% withdrawal rate
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I wrote a long post and deleted it 
Long story short, you can backtest the numbers, but you cannot backtest how you will react to a April 2025 like event and the market didn’t come back up in a V shape but took a 2 or 3 years to get back…
Even your past is not a good guide, because with age, and your ability to earn an income through work vastly reduced, how you will react will be very different.
I think one of important character trait for life is “suffer well”. By now, you should know whether you have that or not.
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That’s true.
I learned my lesson at age 31 during the Black Monday market crash in 1987 when the DOW dropped by 22.6% in one day. I stayed out of the stock market for the next 2 years. I’m at least 25% poorer today as a result.
Since then it’s been “Stocks for the Long Run” and I’ve been at least 90% stock since 1997. I maintained my asset allocation through thick and thin (both 2000 and 2008).
I was very fortunate to experience a portfolio loss at a young age and learn from it.
intercst
Sure. We lived through 08/09 of course, and had a 52% drawdown at one point, that’s 52% of liquid net worth. The only selling we did was to buy even cheaper stuff. I was still working, though. Had started a new business in 2007 and had some pretty good projects ongoing.
I think it took until 2012 for us to get solidly back above our 2007 net worth.
April 2025 I didn’t pay much attention to, wasn’t even a bear market (-20%), was it?
If you’re going to “react” to market events, then you aren’t using the 4% rule of thumb method for your retirement, you are using some other method to determine how much of your assets to spend each year.
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ceteris paribus…
Adrian our last paycheck was dated May 1, 2008. We have lived off that portfolio plus SS. Today our portfolio is 2.998 times the value on June 30, 2008. Our biggest investments are S&P funds and similar broad, indexes. Only in the last few years have I had anything in the likes of soverign bonds. We live comfortable and now that RMDs have kicked we have established a charitable gifting program to keep our portfolio from getting any bigger.
Everybody is different. You mentioned kids - we have no children which is probably a significant item in your spending. And any spending in the 2008 to June 2009 period had any outsized impact on today’s total for folks who retired in Q2 2008.
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2.998 times your 2008 value. Are you SURE it wasn’t 3.000125673%? The difference could be very important.
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No idea. I just assumed by TI Calculator did the arithmatic correctly.
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You can calculate past performance to as many digits as you like. But I don’t think that you can predict the future to more than one significant digit of accuracy. Thus, about all you can say is that the safe withdrawal rate for a diversified portfolio is closer to 4% than 5% or 3%.
intercst
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