Michael Kitces – The 4% Rule and Financial Planning for Early Retirement

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One of the internet’s most-respected retirement researchers and financial planners, Michael Kitces, joins me for an episode of the Financial Independence Podcast!

You may remember that my Safe Withdrawal Rate post drew heavily from the incredible research Kitces has done on the topic so it was great to talk to him directly to dive even deeper into important topics related to early retirement.

During the interview, we discuss…

– Safe Withdrawal Rates and whether the 4% rule is still safe in the current market environment
– The unique challenges early retirees face that normal retirees don’t (and also some of the unique advantages early retirees have)
– How Michael tackles early retirement from a financial planning perspective

If you’re worried about figuring out how much you can withdraw from your portfolio after you retire, this episode is for you!


– Why Michael began researching safe withdrawal rates
– What the Shiller CAPE is and how it can be used to determine a better safe withdrawal rate
– Why the initial criticism of the 4% rule was that it was too low
– What would be a safe withdrawal rate to use today, considering current market valuations
– Human capital vs. financial capital and the advantages of having both
– How to find a financial advisor and what Michael would do if a client came to him with early retirement plans
– The biggest wild card that early retirees need to be concerned with that standard retirees don’t


Michael Kitces – The 4% Rule and Financial Planning for Early Retirement


Better Life Broadcasting says:

So about the advertising… you might want to include a link.. a lot of people listen to podcasts while they're doing something else..

The Travelling Janitor says:

My wife and I will have a federal pension when we retire. How do you factor that into a formula for FIRE?

QQQBall says:

Good discussion about human versus financial capital. Some of us 60-somethings like what we do, but still are facing mortality & don't wanna die at this desk. I think there is a trend more toward hybrid retirement for guys like me. Another issue not addressed is the ramp in medical costs, potential changes in Medicare/SS/Other expenses, ramp in tuition for chilldren, and other unknowns that we have experienced in the past 20 years, makes working in our chosen professions like a financial life vest. I was FI around 2000, but I under-estimated the tuition costs and future medical costs and medical insurance premiums and might have been shaken back into the working world had I stopped. The one thing I have seen in my profession is when guys quit and then have to come back, they are absolutely miserable. The one issue touched on tangentially is that its more fun working now that I don't really have to… stuff that used to bug me – now, not so much…

Lord Metroid says:

Very insightful, I like the point that FIRE is not the only remedy for a job you loath.
I found a job I love and now I simply see my stash as extra security and the dividends as income I can spend to have fun.

Jonathan Fairbank says:

Excellent interview. I think I have enough for FIRE and in a current job working under someone who is out to get me. So, I am a prime candidate to call it quits. Still hard to pull the trigger though.

Rob Santoliquito says:

Housing expense below 10% of income is spot on brother. Old school. Cause it works. Great podcast. Keep it up.

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