The 4% safe withdrawal strategy is a cornerstone of the Financial Independence, Retire Early (FIRE) movement, embraced for its simplicity and reliability. However, discussions on platforms like Reddit reveal that some individuals seek more adaptive withdrawal strategies. The 95% rule presents an alternative, allowing retirees to withdraw either 95% of the previous year's amount or 4% of their current portfolio, whichever is higher, thus enabling a more flexible and potentially sustainable income stream during retirement. This highlights the need for diverse strategies in financial planning for early retirement.
The 4% rule is a steadfast guideline in the FIRE movement, but newer strategies like the 95% rule propose more dynamic approaches to ensure portfolio longevity.
The 95% rule allows retirees to withdraw a maximum of either 95% of last year's withdrawal or 4% of their current portfolio, providing flexibility and greater stability.
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