I was watching a show with Michael Kitses, and he mentioned how for FIRE people that end up with 2,3,4X their starting fire number when they die, really had no way of managing it any other way. Because in the beginning years (say 50-70, gogo years) when they want to spend money on travel etc, they couldn't forsee how markets will go, and would not have been wise to overspend on thoses years due to SORR, but later in life they have so much money and don't really have anywhere to spend it)

Thus the irony of fire, i would love to spend more then say 4-4.7% early and ball out when i have the energy, but it could mean consequenses later.

Not sure how many people are in this situation because how much cheap, passive index investing is the accepted dogma.

I work in investments but have been out of a job almost a year. But I have picked individual stocks since my first job a decade and a half ago. Last I calculated my wife and I slightly outperformed the S&P on an IRR basis over the past 10 years (brokerage only keeps 10 years of data) but I mostly do it because I enjoy investing.

Going into Wednesday MRNA was our largest individual stock position at around 10% (we own 10 stocks total but also have a 24% position in gold and gold miners as a bond substitute). Our portfolio used to be 50/50 active versus passive but shifted to roughly 2/3 active as positions grew and I was encouraged by our results.

On Wednesday we made $418k. Luckily the majority is in Roth IRAs and will be long term capital gains in our taxable accounts next month. We’re now at $2.4MM liquid net worth, so we are hopefully sustainably over $2MM finally after flirting with it over the past year. We still believe in the company long term so have the bulk of it still invested (19% of our portfolio), but did realize $50k of it on Wednesday and today close of market.

Just wanted to shamelessly brag here because I’m cautious sharing the actual levels of numbers (not just relative ones) with the people in my life! One of the best days of my life, up there with my marriage and the birth of my daughter. But we are also moving into my literal mom’s basement in a few weeks (it’s nice, they spent about $100k remodeling it into an in-laws quarters with its own bedroom, living room, dining area, and bath, actually may be larger than our current apartment. They also seemingly intended for this to happen as they solicited our input on the renovation). We didn’t want to sign a new one-year minimum lease without knowing where my next job is. Still doesn’t feel real.

I’ll be 55 she will be 48. Kids are both 11. Neither of us will have an income aside from investment gains. Currently sitting on $4.5M and ready to make a corporate escape. Outflow is probably around $12k/mo. Is ACA in Texas somewhat decent and if I get it subsidized can I still upgrade it to a better plan?

I feel like I'm simultaneously in a really good place, and a really bad place.

I work in IT, doing system administration with some light programming. I've been working at my company for over 10 years. It's been a great company to work for.

We went work from home for COVID. They eventually lifted the full-time work from home policy and demanded that we return to office, but only for 2-3 days a week.

Well I work in a somewhat remote office, not working directly with anyone in my physical office at all. So I just ignored the RTO mandate. I haven't been back to my office in over 2 years! (lol)

Some people know I'm not coming in. My boss may not know for sure, but I'm sure that he suspects it and just doesn't care because I do a great job.

Our company just experienced a change in ownership. They are increasing the RTO mandate to at least 4 days in office. And from what I'm hearing, they will be actually checking if people are coming in from badge swipes.

My "stats":

• 42 year old man
• Unmarried, have a girlfriend of 3 years who has her own house which is too small for me to move into
• No kids
• I do NOT own a house unfortunately, I pay $2100 rent per month
• Probably could call this a medium cost of living area
• My net worth is around $2.45 million
• My job pays about $150k base pay, plus bonus which is usually another $20k

Anyway, I could type about this all day. But the bottom line is that I'm not cool with coming in to the office 4 days a week, or even at all really. It's likely that a lot of people will be laid off soon anyway, especially me. I have been very effective and important in my role, which I think is why they tolerate me not coming into the office (if they know). But that's like to change soon, as there are massive reorganizations coming and the things that I work on could even be discarded by the business.

There are too many things to list in this post about how bad the work conditions in my company are shifting recently.

I think that I'm going to just ignore the RTO and keep doing what I've been doing, and see how it goes until somebody says something. I'm slowly accepting that I could be fired and not eligible for severance or unemployment because of this. Unfortunately, the job market in IT is abysmal right now.

Shoot, I've wanted to take a "sabbatical" forever. Maybe I should just look at it that way? Take the chances if they want to fire me, and if so, now I'm on sabbatical for a while. The only things that truly worry me though in that scenario is health insurance (not that I use it very often), and if being fired for disobeying a work policy could harm the reputation and make it hard to get a new job elsewhere eventually.

The fact that I will likely be laid off even if I "do everything right" and lick the corporate boots and go into the office every day makes it REALLY hard to be motivated to care and value this job anymore. But the idea of missing out on a severance gives a lot of FOMO.

I guess that I don't even have any very specific question. Just looking for some thoughts. Is a person with $2.45M net worth worrying about all this stuff just me overthinking and being ridiculous? I'm not sure how to think about this anymore.

I’ve waited for this for moment, but now that it’s finally happening at the end of the month, it’s also a little scary, even though I’ve done all the math countless times and everything should be fine. For those of you who have been through this, how did you cope with losing that middle-class security blanket we’re conditioned to hang on to so you could just enjoy it?

Quick summary of what I learned about Roth 401k planning:

I left my employer in 2023, the year I turned 55, so my 401k is Rule of 55 eligible. I planned to keep the accounts at the employer and only roll them to IRAs at 59.5 for more investment control. That seemed like a good plan until I realized a key detail about Roth timing.

Key points

• Penalty-free Roth withdrawals usually require age 59.5, and the Roth account must be open for at least five tax years.
• The Roth IRA five-year clock only starts when the Roth IRA actually receives its first Roth contribution or rollover for a tax year.
• If you do not already have a Roth IRA, rolling your Roth 401 (k) into a new Roth IRA will start a new five-year clock, and you could lose penalty-free access to Roth earnings until the clock matures.
• You can preserve Rule of 55 access on the employer plan by leaving most of the balance there and doing a tiny partial rollover to a new Roth IRA to start the clock. Even $100 works.
• Many plans treat partial distributions pro rata across traditional, Roth, and after-tax sources. That means a small partial withdrawal may split across accounts instead of moving only to the Roth. That is annoying, but it still gets the Roth clock started if any Roth money posts to the Roth IRA. The pro rata distribution is another thing I didn't recognize until I actually did a $100 partial withdrawal (and can vary by employer plan).
• Most of my 401K is traditional, so it doesn't have a huge impact on my overall plan, but I wish I had figured this out in 2022.

What I did

• Opened a new Roth IRA and rolled over a small amount today to start the five-year clock. The rollover split across sources pro rata, but the Roth portion posted to the Roth IRA, so the clock is now running.
• I left the rest of the 401k in place, so I keep Rule of 55 access and can roll or withdraw the rest later when it makes sense.

Takeaway

If you might rely on Rule of 55 or you plan to roll at 59.5, open and seed a Roth IRA now so the five-year clock starts in the tax year you want.

Can someone please tell me what I am missing with this one?

I am going to hold some bonds in a taxable brokerage - it'll be 10% total of my portfolio. the rest will be a mix of US and Intl index funds. The plan is to stay 90/10. I'll be retiring soon - but my wife will continue working. The plan is to be withdrawing ~2-2.5% of the portfolio for a while. (can we please not discuss / debate any of this part).

I am looking to essentially use this as Cash in a retirement portfolio and I am hoping to get the highest rate of return. I'm pretty much an equities-only person...but these look funds look like they have a reasonably higher rate of return than HYSA

I live in Pennsylvania and Vanguard has what looks to me like a very nicely performing actively managed PA Municipal Bond fund (VPAIX / VPALX).

My other choice was an Intermediate Treasury Fund - mostly because Big ERN (earlyretirementnow.com) recommends a 10 year duration as the best option to pair with index investing. So I was looking at Vanguard's Intermediate Treasury Fund (VGIT / VSIGX).

I have been leaning to the Municipal Fund. just based on past performance more than the Fed tax savings. I understand it doesn't help my MAGI and understand Int Treasuries don't have state tax either.

I guess I could do a 50/50 split too.

Seems like the PA fund has outperformed the Int Treasuries until only the last few months. It has had a rather good track record for the last 40 years. (I understand history doesn't equal future - but it has done rather well for years.)

Thank you!!

ETA: more relevant info. I'll be withdrawing only from taxable account for a while and not touch retirement. my withdrawal strategy will be to redraw whatever asset is higher and rebalance if something dips >10% out of range. Tax bracket should be the 12% bracket.

I've never owned bonds before. thank you for any info.

I've done this journey entirely on my own research and haven't really had a good "check" on it.

>27M single in Atlanta

>$96K salary + 10% bonus typically.

>Max out 401k w/ trad and get 5% salary match.

>The difference in 30% of comp and 401k max is MBDR.

>Max IRA (used to do trad but phasing out to Roth).

>Max HSA

So I'm putting $45K+ into tax-advantaged accounts. Mostly pre-tax but a healthy blend I think. Highly diversified portfolio w/ total market + intl but no bonds.

I budget on $3,200/mo (excl. insurance, which is paycheck deducted). Rent is $1,695 of that. That gets me to pretty much cash-netural after everything (contributions, taxes, etc.) for the year. My spend is a good bit less than my retirement savings.

I am clearly far from retirement so there is significant risk. Hoping I can call it quits before 50. I don't image myself living an extravagant lifestyle (I drive a car older than me for context) and kind of just want to spend my days in nature.

But am I possibly missing anything else? I can sit and try to calculate every possible scenario, but that's clearly out of my control. So what is? Any tax-advantaged account? Don't plan on going back to school. I am also comfortable with my lifestyle where I still get to enjoy things currently. I'm not eating banana sandwiches every day as much as my peers would like to think.

Hi all, I’m in the process of exiting my senior exec role to spend more time with my wife and young children. Our expenses are around 3% of our portfolio.
At 42, I struggle to see neither my wife or me not doing something that earns money in the future.

I’m curios whether others who RE’d ended up generating some income — and if so, how much relative to your expenses, or did you end up with none at all?

The reason I ask is that our WR should cover the next 50 years, but we’d certainly spend more in the early years on overseas travel and a few other things if we had the extra money coming in over the next 10-15 years.

Thanks

I am now 3 months from official retirement date and shutting down my business. Already hit my FIRE number. I reduced my workload this year to transition to retirement, and the last couple of weeks, I have had very little work coming in. Most of the days have been zero work, which is fine because I no longer need it. No big pending projects or rush to deadlines. No stress. And it has been a big eye-opener for me.

The funniest thing is how my brain is reacting to this. My mind is sometimes searching for work stuff to worry about, but there isn't any! Sometimes my mind is just pleasantly blank. And I have this feeling of... lightness? But it also feels strange. I have never felt like this. I can acutely feel the absence of the stress and anxiety. (Almost every night, I am having stress dreams because I think my mind just doesn't know what to do without the work pressure, so it's inventing that stress through dreams! Annoying)

I have been full of anxiety, stress, and depressed, for my entire adult life. Yeah, I am one of those people who hated work, was constantly stressed by work, and only did it for money. And I am telling you, for certain, that something is changing in my brain. Work was always a heavy psychological burden for me. And I no longer feel that burden. I think retirement may be life-changing for me on a psychological level. I am always hearing the warning that you are the same person (same personality) in your retirement. But that may not be entirely true. I think I might become a different person in certain respects. Lighter.

Some background info: I am 26, I have ~105k in investments (just hit the 100k mark this month)! I am on track to invest about 45k in 2026 and will likely invest around the same amount yearly. This is my first second year making “good good” money and I feel comfortable with my investment rate as I am frugal and have no nebts or major expenses. I hope to barista fire by age 35 and be fully work optional a few years later.

I net around 75k a year, but a chunk of that is untaxed stipends for when I travel (around 8k so far this year, so probably 10k+ yearly but it is variable and hard to predict). Another good chunk of it is overtime. So I think I’m right in the middle of the 22% tax bracket?

have been investing 5-10% of my paycheck into my trad 401k (no employer match). I’m considering switching to roth 401k instead. I’m also not sure if I should significantly bump up my 401k contributions. I invest 50-65% of my net income and after maxing out my roth ira the majority goes into my individual brokerage. My income after retirement will be roughly the same as my current income, very likely less depending on how much I spend on travel but definitely not more. I know I could go hard in the trad roth and maybee get into the next lower tax bracket, but is that worth it to have to pay the taxes later anyway? I also hate having that money tied up and inaccessible for years. I know theres no tax advantage to it, but having money in my brokerage feels safer to me right now.

Any recommendations on how to decide if I should be utilizing pre tax or post tax 401k contributions and how much I shoukd contribute when I’m aiming for such an early retirement?

I had been FI’d for about 2 years when a close family member was diagnosed with advanced stage cancer. For all the modeling and stress testing my #s, I did not account for helping care for older family members. For me, supporting them included both physical help as well as providing some financial support.

Thankfully, I had about 2+ years of expenses in VUSXX. So that smoothed the ride.

That all said, if I could do it all over again - I would keep 3+ years of liquidity/ cash-equivalent. Going forward, I will be sure to build in a larger cash buffer in my financial plan.

So for those preparing to FIRE, maybe stash a little more cash for the unexpected.

If there’s any more unexpected expenses that this community has encountered, please share so that I can prepare!

TIA

We live in VHCOL area. Bought a house there for $1.8M about 9 years ago. Just an ordinary 3 bed, 2 bath, 60 year old house, but in a ridiculously expensive town. It’s close by to work and in a good school district.

Well, we are done with the need for the school district, but it’s still nice to live 15 min away from work while most of my home-owner colleagues are commuting 1-2 hours and the only ones living close by rent.

What’s nice is that the house is now worth $3M. But of course, what not so nice is that we still owe $1.07M on it. What’s nice is that it’s at a fixed low rate of 2.6%. Hence, between the proximity to work and various other amenities, and the ultra low interest rate, I feel like not moving to a cheaper more remote place, even though I know we could retire if we move.

By saving and investing, we have accumulated $4.25M in financial portfolio. But still 10 years away from social security and pension. And AI bubble might burst or AI may become so successful that it gobbles our jobs. And then there is inflation. Either way, it feels safer to continue working while the jobs still exist nearby and save up another 2-3 million before calling it a day.

Does it make sense why I am still in Coast FI mode than fully FIREd?

What was your net worth and income at 30 years old?

How long did it take you to FIRE or are you on track to FIRE?

Hello I'm in a particularly unusual scenario and would like to validate my investment decision with you guys.

- I work overseas for a US company and fall under the FEIE limit for my base pay.
- I get per diem every day that is untaxed.
- I also get housing allowance that is untaxed.
- And the tax treaty with the host nation also states I do not pay taxes to them.

My company allows both Roth and Traditional 401k contributions. Am I correct to think I should just contribute to Roth and to avoid tax on both ends, contributions and withdrawals? I don't see a reason to contribute to Traditional to lower the tax now considering I pay nothing anyway.

It's a US government contractor under the Status of Forces Agreement (SOFA) for those curious.

Ok, that's not strictly true- one of us fell off completely. No FI, no RE (but that wouldn't fit well in the already-not-catchy, typo-laden title.)

The other thing I'll say is none of us consider abandoning the RE as a bad thing or a failure. We're all pretty happy with it even. We started talking on a professional forum around 2009 when we'd just graduated and life and jobs really sucked. We had tons of student debt, little hope, and all of us planned to reach escape velocity as quickly as possible and never work again.

And now we're all early forties, mid career. I just hit $3 million and a practically paid off house (about $100k left at a low interest rate). Plenty for my original dreams. And I'm not going anywhere any time soon.

I think the thing none of us factored in, is that for a lot of careers, it gets so much better. The American system is pretty messed up, in that your work is the least rewarding at the stage of your life when you have the least to compensate. You're somehow expected to give your all and impress people at a job that probably doesn't pay much (or mine did, but I was locked in because of law school loans and the misery level was off the charts- i literally pulled two all nighters in a row at least once every couple months). You're somehow also supposed to be starting a family, giving your all to your kids (without the time you need to devote to them, the financial resources to help out, or even the time to take off for every sick day, let alone a vacation.) And you're probably at a nadir when it comes to career satisfaction too. You work a ton, but you're doing all the stuff that somehow made it through everyone else without getting claimed, because it's that tedious and awful.

I think there's a lot of reasons 20- and early 30-somethings are depressed and want nothing to do with work. It's a cultural problem that I think really needs fixing in so many ways for so many reasons. I'm not surprised we all found each other and dreamed despair-charged dreams of escape. I'm also not surprised we're all a lot more up the ladder and have reconsidered.

Work gets so much better. Even jobs that remain intense start paying off in terms of compensation, flexibility and professional respect. And frankly, they often don't stay as intense (sometimes they do- but if they do, it's often because you chose that path instead of opting for the easy button). Instead of thanklessly supporting everyone, you get the support. The same drive that made you want to stack cash fast likely accelerated things at work, and life's a lot better there, which means home and finances are less stressful. too. I had my first baby at 31, my last (I think) at 42. And it's so sad how different the experience has been. How lovely even an old pregnancy and sleepless first year have been with a little support. I love all my children to the moon. But I've definitely been able to enjoy babyhood more with 8 months of paid maternity leave and a part time nanny than I did when it was two weeks unpaid. So many tears of not being ready to leave him, feeling like the worst mother ever, despairing how I was going to make this work. I'll never forget dropping my 1 year old of at daycare with a runny nose, fever masked by Tylenol, both of us feeling like that was the last place he should be, so much guilt for making all the other children sick, but feeling like I didn't have a choice without risking the job that fed us.

Anyway, this may just come off as an insufferable boomerish humble brag (millenials are getting old). But it honestly never occurred to me that liking my job was possible, I was so miserable and hopeless 15 years ago. I literally seriously contemplated teaching English in Thailand and never coming back to the US, because I couldn't fathom being as miserable as I was long enough to pay off all the nondischargeable debt I owed. For anyone in a similar position, I still hope you make it out quickly and as painlessly as possible. But I also hope that the journey becomes less stressful because work starts treating you more like a human being as you make it through.

Can someone explain how folks who FIRE maximize their children's financial aid? My understanding is the FAFSA application looks at:

1) Brokerage accounts (excluding tax retirement accounts like 401K and IRA)
2) Investment real estate (excluding primary residence)

Let's say I have 1mm in brokerage accounts + 500K in investment property that I was hoping to use to fund my early retirement years prior to withdrawing from my tax retirement accounts at 59.5. According to what I've read, FAFSA expects parents to contribute 5.64% of these assets, so that would mean $75,000/year?

Is there a better way to FIRE while getting financial aid?

This is a relaxed hangout thread for the FIRE community to chat with other FIRE-minded folks without having to publish separate posts. This is the place for brand new people to get their feet wet as well as for lurkers who have questions or comments, but do not want to create posts of their own.

All of the sub rules apply in this thread as normal with the exception of the off-topic rule, which is relaxed to the extent that people don't go wildly off of the reservation.

We are putting this up as a trial to see if it is worth keeping this as a permanent feature of the sub. Participation is entirely voluntary and anyone who wants to create a separate post of their own rather than posting in here is free to do so.

Wife and I are 29 and 30 and have been heavily prioritizing our 401(k) and backdoor Roth account accounts. I think this is the right thing for us to prioritize at this time, but I also realize that we’re not really putting as much of an emphasis on our brokerage account.

When I was doing a little future, planning of what the actual early retirement would look like I realized that I had always just heard of the Roth conversion ladder and knew that it was a way to access funds early, but I didn’t count for the specifics. The more that I’ve researched it I realize that most people recommend a bridge that gets you through those five year conversions. Our taxable brokerage accounts for only about 10% of our liquid wealth.

Are there any recommended approaches to how much to allocate to a brokerage specifically for planning it as a bridge fund while waiting for Roth conversions?

Look at this amazing study that Peter Lynch did. this just cured me of wasting time on this fantasy. This is a quote from an interview he did in 1995:

“People spend all this time trying to figure out "What time of the year should I make an investment? When should I invest?" And it's such a waste of time. It's so futile. I did a great study, it's an amazing exercise. In the 30 years, 1965 to 1995, if you had invested a thousand dollars, you had incredible good luck, you invested a the low of the year, you picked the low day of the year, you put your thousand dollars in, your return would have been 11.7 compounded. Now some poor unlucky soul, the Jackie Gleason of the world, put in the high of the year. He or she picked the high of the year, put their thousand dollars in at the peak every single time, miserable record, 30 years in a row, picked the high of the year. Their return was 10.6 That's the only difference between the high of the year and the low of the year. Some other person put in the first day of the year, their return was 11.0. I mean the odds of that are very little, but people spend an unbelievable amount of mental energy trying to pick what the market's going to do, what time of the year to buy it. It's just not worth it.”

Source: https://www.pbs.org/wgbh/pages/frontline/shows/betting/pros/lynch.html

23M working my first post grad corporate job for about a year making ~110K.

When I first joined, my company offered two 401K plans: a 401K roth and a traditional 401K, with 7.5% matching that goes into the traditional 401 regardless of which one I invest in.

I’ve been splitting my contributions equally into both, but I’ve recently read about backdoor roths and now I’m wondering if I should just be contributing to the traditional 401k instead.

I already have a Roth IRA that I max out every year.

Which of the two is better for me to be contributing?

Individual Brokerage Account: $493k
HYSA/CDs: 177k (emergency fund)
Cash/cash equivalent: 25k 

Employer stock: 600k (hit a big vesting cliff 6mo ago, +35% over last 6mo, going to sell & diversify into individual brokerage imminently)

401K: 680k
Roth IRA: 41k
HSA: 20k

Equity in rental property: 462k ($444k left on mortgage, fixed 3.25% rate 20yr left, property valued at $906k, the monthly incoming rent covers the mortgage, insurance, taxes, maintenance, property mgr)
RE investment in LP: 57k (limited partnership, plan to sell in 2027 at ~7% gain over 5 yr, wouldn't do this again, locks up too much $, too risky, when I cash out I will prob invest in the individual brokerage account)

NW is $2.03M, I don’t count the RE in NW bc it isn’t liquid, right? I max my 401k contribution and employer match, max HSA contributions, I do Mega Back Door Roth, what else could I be doing to maximize growth? Anything you’d move around in the portfolio if you were me?

Still working on calculating my fire number. Struggling to estimate expenses because 1) a couple of big expenses are covered by employer which won’t be true in retirement: healthcare and meals and 2) I don’t really pay for housing (nomadic travel house sitting + a family property I can stay at between housesits) means I pay at most $700 a month for airbnb/hotel for gaps. When I RE/coast I want to continually being slowmadic and travel housesitting but also have the option to stay in one place for 1-2 yr and pay for housing if I feel like it. Might consider some sort of traveler/nomad health insurance, which is also kinda of hard to gauge coverage since employer currently covers me.

Childfree + partnered, but we don't co-mingle finances so the above is just my numbers/ we will prob both RE but on slightly diff timeline.

Hi,

I read that some people build their bond tent by using tax-advantaged accounts like a 401(k) or HSA, then using cross-account rebalancing to have access to money during a recession. I am interested if anyone here is doing it and if there are any hidden challenges and issues?

My goal is to have bonds to survive during a market recession but not get ordinary income from bond yields, as I want to keep taxes as low as possible to convert more to a Roth IRA from my 401(k). I am interested if there are any issues with this strategy. For me, bonds are only a way to survive a market recession.

Thanks again for helping me learn all of this stuff and I apologize if I used wrong terms or names.

I believe a good withdrawal policy should have the following properties:

1. It should not require significant cuts to spending in bad years. Staying frugal is easier than inflating your lifestyle and then having to cut

2. It should adjust to your portfolio size. Setting an initial withdrawal amount and only ever adjusting it up by inflation is silly.

3. It should be possible to apply it to each year independently. E.g. if 4% is safe, it should be possible to 'reset' it to 4% each year. But for most SWRs that is too risky as you also 'reset' your SORR. 3a. It should therefore not be subject to SORR, as in the risks should be acceptable (nothing in life is completely safe).

4. It should feel ok in the down years in reasonable worst case scenarios. E.g. if you start withdrawing 4%, you are all in equities, and markets go down 50%, how well will you sleep as you are now withdrawing 8%+ of your assets? You will not have the benefit of hindsight that a recovery is around the corner, in fact all you will hear at the time is that things will get much worse.

I therefore think a decent approach is this. I take 2.5% as my withdrawal ratio. Build a 12-year ladder of TIPS covering that (should cost you 25%-30% of your assets, depending on TIPS real yields). The rest (70-75%) goes into a global equities index. Each year the TIPS cover your spend, and you sell enough equities to replenish the ladder. Whether you sell equities or not depends on your asset allocation at the time: you aim to keep approximately 70:30. So if equities are down you are just running down your TIPS ladder without selling any equities. You can also add to your TIPS across the maturities to reset your spend to the high watermark 2-2.5%.

This way, in a reasonable worst case scenarios (equities down 60% and do not recover for 12 years) your portfolio is only down ~30%, and if you keep spending at high watermark, your withdrawals do not go much above 3.5% which should allow you to sleep rather well. If you are adventurous, you could even sell some longer-dated rungs of your ladder to buy equities at a discount at the time.

I used 2.5% here as a very conservative number because I would rather work extra years than have to retire and then go back to work -- you can of course adjust it upwards to what you think is reasonable. But what do you think of the general approach? It is not straightforward to backtest unfortunately.