How to Retire Early (The 4% Rule?)
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- Опубліковано 10 лют 2025
- Meet with PWL Capital: calendly.com/d...
I filmed this video before the COVID crisis hit. I still wanted to share it with you since I think the content is useful. Hope you enjoy.
NYT Article: www.nytimes.co...
Referenced in this video:
How Much Can I Spend in Retirement?: A Guide to Investment-Based Retirement Income Strategies: amzn.to/2LicSQ7
Determining Withdrawal Rates Using Historical Data: www.onefpa.org...
Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable: www.aaii.com/f...
Equity Risk Premiums (ERP): Determinants, Estimation and Implications:papers.ssrn.co...
The 4% Rule-At What Price?: web.stanford.e...
A rule for all seasons: Vanguard’s dynamic approach to retirement spending: www.vanguardca...
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Just realized that my favorite UA-camrs are Canadian....
Richard & Ben what a duet.
Probably cuz they are less slimy than americans.
What are the other ones?
@@qjsharing2408 Has to be NL
I saved like crazy when I was working so I could retire early, which I did in late 2016 when I was 47. So far, I haven't made any withdrawals from my savings, which is 100% in stock index mutual funds. I've been able to live (frugally) off of my military retirement pay. I don't mind if I die with a large savings. I'll give it to my town school district or local community college.
I don't want high consumption in my retirement. I want low stress. I can get that without spending much money.
Nice Michael. Sounds like you really got the message. I'm 47 myself but still have many years of work ahead unfortunately.
Michael Gainey Congratulations on early retirements. I am curious have you noticed any dramatic change on your quality of life post early retirement?
I for one am scared of getting bored out of death. If this quarantine has teached me anything early retirement is not for me lol. May be I should start spending money more instead of worrying much on retirement.
I think we shouldn’t get hung up on the word retirement. I prefer financial independence. So if you are FI, you decide to work at something or not. If you like the work you do now, stay, but know you have the freedom to walk away. You will have more confidence at work to speak your mind and kiss up less. You can also find some meaningful part time work. I don’t think this corona period is a good comparison to being retired.
Michael Gainey, veteran, retired early and now taking care of your father, you sir have my respect and I hope you enjoy your retirement and the time you have with your father.
Great attitude, congratulations!
I just want to reach out to you and thank you for all that you do.
I have watched all of your videos, many of them multiple times.
I have never been able to find anyone who cites their work like you do. It is incredible.
Your channel has defined the way that I invest all of my money!
Ben,
Heartfelt congratulations with your new baby born. I wish you and your family all the best in health and happiness.
Congrats Ben! Really liked that intro, connects you to your audience - would like to see more of that style in the future
I'm in my mid thirties and considering an "early" (as in 50-55 year old) retirement. I've read a lot on the FIRE movement but am always left with a "sounds too simple to be true" taste in my mouth. The principle is simple, but thanks for finally putting into a video/words why it's not "THAT" simple either. Super helpful, as always .
Those are eyes that didn’t get much sleep Ben 😉. Congratulations!!
😛🙂👍
Congratulations on the new baby. I rarely, if ever, comment on UA-cam videos, but I wanted to thank you for your very informative channel. I follow many financial blogs written by respected professionals but I find your videos the most instructive and educational.
Thank you!
I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Suzanne.
I'm surprised that this name is being mentioned here, I stumbled upon one of her clients testimonies on CNBC news last week...
@@Lourd-Bab Really you people know her? I was even thinking that I'm the only one she has helped walk through the fears and falls of trading.
@EthanCarter01 As a beginner what do I need to do? How can I invest, on which platform? If you know any please share.
@@RyanBlake-o7b OMG is this same person that helped me Invested $2000 and after a week we received $7,500. That really helped us a lot to pay our bills. wow such a small world.
@@JakeSullivan-h2i Suzanne Glady Xander is her name .
Very good and well balanced video. I stepped away from the corporate world at age 38 because of the 4% rule. My approach has always been to adjust my spending based on returns. A trade off I'm willing to make. Also, since "retiring' from the corporate world, i have used some of the portfolio to buy land and i do work on some projects that interest me. Thanks for the video
Finally, a straightforward video on the topic of retiring early backed up by numbers. I appreciate that you make clear exactly what the risks are for believing in a dated formula. I'll stick to my personal "3%" rule, but who knows, that could change as well.
Earned a sub.
Congratulations on the new addition to your family Ben!
This is hands down one of the most in-depth videos that I've ever seen on this topic. My wife and I have started a channel documenting and teaching on how we plan to reach retirement by 40. There are many considerations in this video that we will definitely be taking into account. We invest in real estate as well which could mitigate some of the mentioned risks. Regardless, I truly believe that this 14mins has vastly increased our chances of success on our journey. Thank you! btw, you just gained another sub :)
Congrats on the baby Ben! A question for some possible content: How do government bailouts and other similar government actions affect markets?
I can't really comment on market affects, but Stress Test by Tim Geithner was a really interesting read on the philosophy and impacts of bailouts and government actions during and after the 2008 crisis. It was a great and informative read, even for a non-American (fun fact: the government actually made money on their bailouts).
I am working on content related to this.
Riley F well of course Tim Geithner would say that. He was one of the architects of the whole wall st bailout along with bernanke
Ben Felix I look forward to watching it!
Great question! Looking forward to a video of Ben about this.
This analysis is clearly flawed as it neglects to account for a relevant number of BINGO winnings.
Add the wins to the fact that a lot of bingo places sell meals and drinks super cheap, and finger food for free, and you're golden.
This is truly a deficit in Ben's investment plan.
Lol... and pull-tabs
I have laughed so much more than I should have because of this thread.
Bingo cards are definitely a cornerstone of any retirement portfolio....
I didn't see you blink not even ONCE in that video! No matter, I appreciate the insight. I'm investing for my retirement as well and these tips are quite helpful. Thank you
As I watch each of Ben’s video, I have a bet to myself whether he’ll blink once or not. Ratio is about 30% blink videos so far! Seriously, his videos are great.
I'm work like financial advisor in Brazil and I know that it's impossible compare these stocks and bond's informations with here, but i'd like to say that this video is so necessary for everyone to understand that nothing is free or easy. Thank you for that, Ben
First of all, congratulations to your newborn. Many thanks for your Videos Ben. They are just awesome. Keep going!
What I like about the 4% rule is that it introduced me to the possibility of early retirement. While I'll tell people that I'll retire at 50, for numerous reasons I don't tell them that I'll probably start doing something part time that I enjoy. Also I don't have to rely on that fund to cover me from 50 until death, since my government guaranteed pension will kick in at 70 and it'll be enough for living expenses. The goal of my FIRE journey (or more realistically just FI journey) is to have options and freedom.
Same line of thought
ever get concerned the govn won't or won't be able to provide their end of the contract when you're 70? i think about this often
Congrats on your 4th child Ben! You are a legend in the FIRE movement all the way over here in Australia. Keep up the great work.
Super super helpful analysis. Thank you!
That is the most intelligent piece I saw on early retirement. I ‘kind of’ retire early at 46. My investment are enough to live very frugally if necessary but I adjust my spending depending on my income. That give me the liberty to choose to work for things that are fun, but maybe less secure. So far (4 year), I didn’t touch my investment. To adjust your spending and to maintain some income give a whole different picture. How did I keep a precise image financially... a simple Excel sheet that model a life expectancy to a 100 years.
Well that was better than expected. New sub!
@Ben Felix 🚨🇳🇬🤴🏿 This is a scam y’all 🚨🇳🇬🤴🏿
I retired at 60. Paid off the house and all the cars. I live modestly and my costs are about 1500 a month. My portfolio can earn over 2000 a month. I have a pension also at 65. Too many people want too much too fast. Too many people "put on airs" faking the image of being rich by charging everything.
you also will get social security in which by the sounds of it you dont need. you are a prime example of why social security should be an option and not forced.
I think it's important to consider real estate (specifically rental properties) as a retirement investment, especially when retiring early. They allow you to trade a small amount of work in management for a substantially higher rate of return.
Yeah, for sure.
If you bought property 50 years ago, let's say, in Detroit, you would be making money hand over fist right now.
Prob. you should invest into luxury apartments in pencil towers in NY, they won't be affected by climate change (because of the altitude).
Been doing calcs and I personally will be utilizing the 3% rule in early retirement because I want to have a good mindset while running a small business. Not needing to work for money, but doing something low effort and no commitment to keep me engaged and reduce risk.
It's more conservative and almost always a better choice to go above what you think you'll need to have.
what sort of business can you give me the style without giving too much away? I would be interested in a low effort type thing for retirement too but of course thats many years from now and wouldnt want to steal your idea regardless just the overall concept haha
@@RenaissanceAnon I have a few now. 1) UA-cam channel 2) Reselling items online from garage sales 3) Exotic plant sales.
UA-cam = lots of upfront effort and honestly more difficult than people give credit for
Ebay/Amazon = lots of knowledge needed on what's valuable. Often a lot of mistakes made when first starting by over-paying for items. Online scammers are more common than you would think lol. Additionally, house can become cluttered if not organized properly with shelving units (Keep in basement with shelves if possible).
Plants = Finicky sale cycles & moderate amounts of care needed to keep them alive and growing. Plant customers are surprisingly picky.
Plan on getting up to the 3% withdraw rate placed in investments, then quitting my regular job & only using the investment money + 3 low effort businesses to retire on.
I'm only being so conservative because I'm planning on retiring before 40 years old.
Current savings rate is ~75% with maxing out 401K, Roth IRA, and HSA tax advantaged accounts.
I discovered your channel today. It's informative, scientifically based, and most importantly does not sell you anything. I love it. Keep them videos coming!
@Ben Felix 🚨🇳🇬🤴🏿 This is a scam y’all 🚨🇳🇬🤴🏿
this may be the best financial channel on youtube.
Congrats on the new baby. Hope baby is doing great.
Congrats on the new baby Ben! This was very eye-opening and made me happier to have a 100% stock portfolio for the next few decades. Very much agree with the fact that retiring early and not doing anything will not bring satisfaction as most people will get bored and in turn probably become unhappy. Finding something you love to do and earn some sort of income will always be crucial.
Congratulations on the child Ben! Love your content and keep up the good work. Your videos have helped me understand the markets a lot more and have made me passionate about investing. Thanks!
Congrats on the baby Ben! Take your time and come back when you are ready. Your content is the best one in YT on investment topic with it's quality and great delivery - i feel lucky to find your channel, the best subscription so far for me. Srsly recently it is the only reason why I am opening YT is to check if there is smth new from you.
This is fantastic! I am hoping to be FIRE in the next 10 years. But even more so after watching this video, it supports my idea to cut my hours back but still work enough to sustain the level of income that I will eventually withdraw at the 4% rule.
Always love your videos. Aand congrats on the 4th baby. Hope the newborn and your family are healthy and safe
Congrats Ben on the baby. Wishing safe health in this period.
Congratulations on your new family member. Best of luck to you, your wife and kids Ben. Thanks for the content.
Ben, your videos are so well-redearch and you are so on top of your game. So pleased to see a fellow Canadian so knowledgable and well-spoken. P.S. Also love your podcasts. P.S.2. Congrats on your new baby. 🙂
Congratulations to the family! Thank you kindly for the awesome video
Ben,
This was your best video to date!
The 4% number is silly.
All the people I know of, that are currently FIREing, are earning income, so they aren't really retired in the traditional sense of "Del Boca Vista". :)
Personally, I don't see how someone can truly "retire" at 40 and do nothing.
The dynamic Vanguard model makes logical sense. Most people probably spend less when the markets aren't performing well and spending more when they are. I know this is what my retired parents do, even though they don't have to. It just feels natural to spend less during bad times.
If I'm not mistaken, the dividend yield on the Vanguard Canada FTSE etf is about 3.5% now, so, in theory, a retiree could just spend the dividend and never touch the principal. Historically, the yields on large caps have risen around the level of inflation.
Tax would be also a consideration. Tax on $40K/year in dividends, in Canada is virtually zero.
If I was going to retire at 40, I would consider going 90% large cap index and 10% cash and forgo bonds altogether.
I think your best point was the last one. If the person has skills, they are much better protected but I still think it's better to add value to the world and being at least a little productive.
Thanks RazoRock!
You may not have realized it at the time, but you've been producing content relevant to the current moment for years. Covid19 scared me into taking my financial future more seriously, and your videos about market timing, stock picking, and index investing have steered me away from bad strategies and given me the confidence to stay committed to good strategies even with all the uncertainty. By all means if you have more topical content in mind then I'm sure I'll enjoy it, but I encourage you to stay committed to your long term content strategy even in a volatile youtube video market :)
Also, if you're taking requests, I could use a video on tax efficiency - tax harvesting, implications of taxes on asset allocation, and so on. This is the stuff that I find most daunting about managing my own investments.
Congratulations on your baby Ben! Wish your family all the best.
I really appreciate this more balanced look at the 4% rule. I feel like you could easily make a video that spanned several hours on the topic.
Congratulations on the baby Ben. It's the best feeling in the world. :D
Congratulations for the new baby! Love your channel.
You are quite the role model for me. Congratulations on your family and your other success. Greetings from Germany.
I'm Brazilian and despite your focus on the Canadian investor I must say to you that it has been very usefull to me as a knowledge of investment in general and made me reconsider all of my previous thoughts (like Brazil isn't the only market that I can invest) about it. Thank you for so great content !
Congratulations on the baby!!
1800 likes/4 dislikes? This is the best ratio on UA-cam! Thanks, top content as always
Excellent as always Ben. Thank you. Straight forward, practical approaches backed by research and data....
👍
Great video, as always, Ben. Learned some things I didn't know about the 4% rule, which is cool. I have seen some of the FIRE websites talk about the potential for failure of the 4% rule and ways to mitigate that. One would be that most folks (even those who retired in their 30's or 40's) will collect Social Security. Another is (as you suggest) making money after retiring from the full time job. If someone retires early, they are likely very hard working, talented and industrious. Given these traits, I would expect most FIRE devotees will find a way to earn some extra bucks once they quit the 9 to 5. Another is being flexible with your spending. You might spend the full 4% (or even 5 or 6%) during highly profitable years and reduce down to 2 or 3% when times get tough.
Would love to hear more about those "mathematicaly dense solutions"
From what I've seen these just involve moving to bonds as you retire, and then back to stocks as you get older.
Google “bond tent” and “sequence of returns risk”. Kitces has a great write up on it.
Please do not hold me liable if you injure yourself reading this material :)
web.stanford.edu/~wfsharpe/RISMAT/
@@BenFelixCSI i wont 😂 thanks. Keep up the great work
@@BenFelixCSI On page 2 of section 7 ("market portfolio"), he literally dismisses the idea of factors and factor tilted portfolios, and says that they will be arbitraged away. Thoughts?
Congrats Ben! 👶🏼 Your content is relevant! I’m in the early stages of figuring out retirement and FI. Vanguard’s dynamic approach is news to me. Thanks for mentioning it.
4th!!! Congrats to you and your wife. We use a variation of the floor and ceiling idealogy proposed by Guyton and Klinger. They called it "guardrails" and it works excellent. It's very important for folks to get away from the theoretical idea of a "fixed" spending plan. A very long retirement requires either a very large buffer or the ability to dramatically reduce spending. The later I suggest very few people can do in reality. Keep the great videos coming!
Congrats on the new baby!!! Thanks for the always amazing content.
The most clear and complete video I've seen on the topic. Thanks very much for the great work!
I really appreciated this video! You lay out really helpful ways to think about what's important to different types of people. For myself, I am a young worker who doesn't even know exactly what I want from "retirement" but I do think that financial independence a healthy way to be stable.
Congratulations on the new addition Ben and I appreciate that’s it’s challenging to produce content. Very beneficial. Thank you.
Fantastic video and congrats to you . Thank you for this video, I have shared this with my friends who are basing retirement on 4% rule
Congratulations from Spain Ben, thank you for your content.
Holy, this video came unexpected. Just saved my day :D
Congratulations on the baby! Enjoy the time home, look forward to more vids.
Thanks Ben. God bless you and your growing family. Your work has really helped me and my family. We appreciate you.
I'VE BEEN WAITING FOR THIS VIDEO FOR SO LONG. 😭
I also prefer the idea of a ceiling and floor approach, but there are also other strategies that can be implemented with any withdrawal strategy which make a lot of sense. ERN wrote an article on the benefits of "one more year"... Staying in the workforce for an additional year AFTER reaching your retirement goal. This allows your best egg to grow beyond what you need, helping to mitigate sequence and longevity risk. In addition to "one more year" you could reduce your spending (smaller withdrawals) during the first few years of retirement or in years when the market is down, the former is probably the better solution. A creative way to reduce spending without necessarily foregoing luxuries is to spend time exploring (low cost of living) countries.
A combination of these strategies could set you up for a fairly low stress retirement even at longer time horizons.
Congratulations on your fourth!!! Loving your channel!
4th!? Wow, congrats boss. Thanks for releasing, I love these videos. Keep it up!
Congrats on your 4th kid! What a blessing!
Congratulations on the new addition to your family!
Usually I dont comment on youtube. But you leave me with no choice. Thanks for the great content and keep up with that good work. Stay healthy.
Thanks for the rare comment!
Thank you for sharing. Good to see your take on things
Congratulations on your new baby! xxx great reason for taking a breather...
That's very good research, I'm glad you've published it!
Hi Ben! This is my first time to your channel. Thank you for posting this video. It is definitely relevant. My friend and I were just having a discussion about the 4% rule and your video really helped break things down. Thoroughly enjoyed this!
Congratulations for the baby!
Best rule for me going forward is to not have a mortgage at retirement. If you could either save up enough money or sell a home you have been living in for a while for a nice profit, you could easily buy a "smaller" home for cash and do away with mortgages entirely. Living in or close to a city where owning a car is not required would also save you a lot of money in retirement. Basically, if you could just worry about food, utilities, and taxes, and medical expenses in retirement, the 4% rule can easily work itself out. Keep an open mind in retiring abroad where the cost of living and cost of healthcare is much lower. Not to mention, you will find the quality of healthcare is so much higher in other countries.
the car part seems negligible if you own, and it's kept in good shape. insurance at that age can't be that expensive, and you drive (use gas) as much as needed. i think having a car is a good backup to public transportation and other unforeseen instances.
Congrats to you for a new family member....
I have been discussing this at length with a friend Bengen rule v dividend investing. I am a fan of % withdrawal, not necessarily 4%, but to be able to do this the key is to build a nice large fund in a tax efficient savings account which means you can ignore taxation.
Congrats on the baby to you and your wife! God bless your family
As always when I finish watching one of your videos I am both smarter and sadder.
right :) sadder because got the knowledge bit late. thats me.
Congrats Ben. Thanks very much for the content. You're putting money into our pockets!
Congratulations on your new baby! Looking forward to more content when you are ready.
Great video as usual Ben! Love the material where you need out on different papers discussing their conclusions.
One quick suggestion if some of these papers are publicly accessible if you could put them in the description that would be great.
I would love to read some of these papers but afraid I will quickly realize I am way over my head.
Very good point at the end, it really pays to continue doing some kind of work in retirement - it's also good for your health and mental well-being. This is amplified in early retirement situations.
Congrats Ben! One other factor in this issue is the possibility of getting a pension from the government in the later years. You don't necessarily need to have your portfolio last your entire life. The elderly generally don't spend a whole lot so living at least partly on a pension is not the end of the world.
Wow four kids and you find time to do this and work... Damn you got alot of energy bud. I got two kids and I'd struggle! Congrats on on the new little one!
Congrats on the new arrival - hope the family is doing well during lockdown. Agree with you re 4% rule and you have articulated the risks really well. I don't think retirement should be strictly retirement but instead provide freedom and to work on projects and areas that provide more than just money.
Love the videos. Congratulations on the baby!
Congrats on the new baby! Great content. I really appreciate this channel and the podcast. Keep up the good work!
@Ben Felix Your account got hacked I think.
Real retire by 40: Get high paying job, live at home, don't have kids, don't get divorced, drive old used cars. Retiring early is pretty easy, but that is a boring life, no kids, no fun spending. which is why i use a financial adviser who handles. my investment portfolio. That’s definitely the only other realistic way to retire early. Goodluck!
impressive. I myself am pretty much focused on building my dividend portfolio
hi i'm new to this please any advice for a retiree who would like to make huge ROI from a business?
I took a trade this morning and I literally said "this is not trading like a spoiled brat." And what happens? The stock I rolled the dice with got beat down because the dip wasn't done dipping. I still lack that discipline, but at least now I'm aware of my lack of discipline.
@@tonimhamilton2072 well i have two advices1) Read The Millionaire Next Door byThomas J Stephen. 2) Use a professional investment strategist/ Financial adviser. you can use mine i found her on a webinar on the F.I.R.E movement, you can look her up, her name is Lucy Maria Koss
@@feliciasherbert989 🚨🇳🇬🤴🏿 This is a scam y’all 🚨🇳🇬🤴🏿
I often feel that early retirement is not ideal for everyone BUT if we all strove towards this goal we would be that much better off when we do retire. Correcting bad habits and focusing on savings has many positive outcomes!
My lifestyle has been the same for years - rent out some space in my residence - and I still offer massages and shaving - low to no debt - low taxes - dividend stocks - compounded approach - tax efficient / simple as that - no love life - no dependants… I’m the boss 😅 / but that’s how I pull off life 😊
Possible content idea: RRSP vs TFSA investment allocation at differerent income brackets, making some callouts/assumptions like:
- 15-40 year time horizon until retired
- already taking advantage of any company match into RRSP if available
- no huge expenses expected in the next 5-15 years (otherwise TFSA makes more sense)
- neither account is maxed out
- investing in low-cost ETFs within either bucket
My understanding is that if you make < $49k CAD, you should go 100% TFSA and 0% RRSP as you're already in a low tax bracket. If you're making > $97k, then it makes a lot of sense to use RRSP (save taxes now, and pay them at a lower rate when retired). But for those making $49-$97k, it's pretty murky how much to be allocating between the two tax-sheltered accounts.
Enlist at 17, retire at 37. Maximize contributions to TSP matched 5%. Use TA and get a fully paid for bachelor and then master’s degree. Some MOS’ like radiology pay for your training to specialize in MRI, CATSCANs, and national licenses so you can work in any hospital after your career is over. Live within your means the whole time, own the cheapest car possible and keep it the whole time, and sparingly buy minimum necessary furnishings, clothing when on sale, and invest in stocks everything else. When retired, you’ll have medical for life and be young enough to leisurely work another job.
@Ben Felix Why not live off of cash flowing investments instead while keeping the principal secure? Ie: REIT's, dividend yielding stocks, bonds, or even rental properties (assuming that the property is cash flow positive). A diverse mixture of these assets can easily yield a 3-4% cash flow return which a retiree would seek annually while not having to ever touch the principal so long as they keep a reserve fund for emergencies where there may be a dividend freeze or vacancy in their rental property.
Actually I like Ben. He is among the very few who back his opinions with proper research papers and logic. Very scientific. I was under the impression of 3.5% for (perpetual withdrawal rate). Looks like I need to be even more conservative at 2.5% or have variable spending. Thanks for the insights!
Awesome content and congratulations on the new baby
This is golden!! Thank you! Can you please a continuation video of mixing real estate in the soup and give us some opinion of how would that stock + real estate. IT would be super useful for us to hear your opinion on this
Easily my favorite investment channel so far. Who should I talk to to review my investments. Even with my leans towards ETS and indexes I still feel like I don’t have a diversified portfolio.
Congratulations to you and your wife, Ben!
Congrats on the new baby (and on the continuous stream of good videos)!