We break down exactly how much you need to retire early.
We explore the famous 4% rule, where it came from, and whether it’s still a reliable rule of thumb.
We also explain how to live off your assets in practice, other considerations like home ownership and property investments, as well as how to approach financial planning with flexibility and common sense.
(you can also download the mp3 file here)
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We’ve covered a range of topics so far. Check out the complete list of episodes on the FIRE and Chill podcast page.
Do you have something to add to this discussion? Share your thoughts in the comments below…
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Hey Dave, great ep!
When calculating he amout I will need to retire, should superannuation be factored in? Or do you recommend using only assets available until preservation age is reached?
Hey Liam, glad you liked it 🙂
Personally, I didn’t include super assets, given the distance from access and it not being a massive amount. But they can definitely be included, especially for those who will be retiring in their 40s/50s, since access is then a lot sooner and it’s more practical to include in the numbers at that point.
Thanks for your response, dave.
I’m only 25. So for now it makes sense to focus only ln my assets outside of super for now.
Cheers
Yes, I think so mate, especially if you want to retire pretty early 😉
I’ll listen to this as I drive into work later today – my 3rd last commute.
My retirement is looming – seemed like it would never come but now it’s almost here.
Tomorrow I give my farewell speech at our staff Christmas function. Maybe I’d better start giving some serious thought as to what I’m going to say…
(ps. I better not have second thoughts about pulling the pin on the career after I listen to your poddie!!!)
I love hearing your thoughts as it approaches 😀
Haha I don’t think we’ll cause you to have second thoughts – both Pat and I are pretty optimistic for early retirees!
Gotta say I’m disappointed Pat cut his rant short on the age pension and home ownership. Man, that could have been epic! 😉
Good podcast otherwise though! I think the most important thing to keep in mind is that in the majority of scenarios you end up with more money than you started with. The real key is not having big market drops in the first 5 years after you retire. if you can avoid those or ride them out, then you’re pretty much golden.
Haha yes, maybe we’ll save that one for another day!
Hitting a rough patch at the start is definitely a concern, but as mentioned, there are multiple ways to approach a scenario like that. And to add to your point, I think in most cases those who actually leave work end up earning money again in some shape or form even if they didn’t plan to, which makes a mindblowing difference to the portfolio needed (or not needed rather).
Hey, I love the podcast. I was just wondering is the email we use to send in questions fireandchillpod@gmail.com ?
Thanks Murray 🙂 Yes, that’s the one!
Awesome podcast guys. Thank you so much! I’ve been meaning to listen for ages and I’m so glad I did.
Listening to you both with Aussie accents and actually doing it makes it all seem more doable.
Thanks very much Girt, that’s great to hear 🙂
Hi Dave,
With inflation gone up significantly in the last 2 years as of September 2024 is fire still achievable using the 4% rule??
Thoughts?
With thanks
Mick
Hey Mick.
Yes, the 4% rule still applies. Remember, it means you need 25x your annual expenses in investments to live off forever. If your expenses have gone up, it means a higher target is needed.
It’s worth remembering that as expenses go up over time, so does the income and values of investments, which is precisely how it’s able to keep funding expenses over the years. Hope that makes sense.
Thanks Dave makes complete sense,
thinking of pulling the work pin at end of year work as small civil earthwork contractor
us early 50s no debt, own our home, investments outside of super 1.3 million
smsf 800 k
time to hang up the boots!!!
Sounds like a fantastic situation, well done and congratulations!
Wonderful, Mick, and congratulations! I love hearing about Australians who have found their ‘enough’ and are able to act. Similar age to you now, hoping to join you in about four years.