The F.I.R.E. (Financial Independence, Retire Early) movement has gained traction as many seek to escape traditional work lifestyles. While appealing, it poses substantial risks, particularly with factors like bear markets and unexpected expenses that can threaten financial plans. Participants often rely on the 4% safe withdrawal rule, which assumes continued market growth. However, economic downturns can challenge these assumptions, making it vital for F.I.R.E. advocates to maintain a cash buffer to weather financial storms and ensure long-term viability of their independence.
As wonderful as financial independence can be, it goes without saying that it can just as quickly go away with a few economic and life changes.
One of the most prominent aspects of the FIRE movement is the idea that you can live around the 4% safe withdrawal rule.
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