The 2025 Safe Withdrawal Rate for FIRE (It’s NOT 4%) | Bigger Pockets Video

Episode #642

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Bill Bengen (The Inventor of the 4% Rule) Talks Retirement, Past Crashes, and How You Can Withdraw Even More!
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Most people assume the “safe withdrawal rate” for retirement (or early retirement) is 4%. But, if that’s the case, why is it SO hard to find anyone who’s gotten to their FIRE number, quit their job, and lived entirely off of the 4% rule? If the 4% rule is so safe and backed by solid math, why are so few FIRE followers confident enough to actually use it? We don’t know. So we asked Karsten, AKA “Big Ern,” from Early Retirement Now to help answer!

Karsten has done the math, and the 4% rule checks out. But even he, an early retiree, doesn’t follow it. So, instead of the safe withdrawal rate, what’s the comfortable withdrawal rate early retirees should be following to FIRE on time and with less stress? And with turbulence in today’s stock market, and rising prices (which cause your spending to rise), what does the right FIRE portfolio look like?

Karsten walks through how your portfolio should change as you approach FIRE. He explains why hedging with cash-flowing assets may be a smart move, how much cash to keep on hand, and whether those reserves can actually protect against sequence risk. Plus, should you pay off your mortgage on the path to FIRE? Scott and Karsten offer two different perspectives on whether it’s smarter to pay off your mortgage or invest that money instead.

If you’re planning to FIRE, this is info you need to know!

00:00: What’s the Right Withdrawal Rate?
15:24: Retiring with Side Income
17:29: Withdrawing During Economic Turbulence
25:19: Sell Stocks for Real Estate?
30:38: Do This Before Retirement
34:47: NEVER Sell Stocks?
44:06: Pay Off Your Mortgage Early?
49:32: Will ANYONE Retire on 4%?