1, 2, 3, & 4%

There’s lots of talk in the FIRE community about the 4% rule. I think that’s rather aggressive. So, I’d like to look at some more conservative figures, such as 3, 2, and even 1%. How far could we get on those figures? Let’s find out.

Sustainable Withdrawal Rates

As of June 14th, 2018, 0ur liquid investments (excluding cash) are just short of $150,000. (Most of our net worth is tied up in our home – like most Americans.) Given that, here’s what the following distribution rates look like off of our investments today:

4%  $      5,968.76
3%  $      4,476.57
2%  $      2,984.38
1%  $      1,492.19

Unless going the Jacob Fisker route, that’s not going to cut it. I don’t see us living off just short of $6,000/year.


We will be getting a tax giant tax refund shortly. (This is because I suck at taxes.) That refund will go towards maxing out my solo(K). That should give us a little bump. There’s an emphasis on the word little.

Portfolio Balance  $  167,719.00
4%  $      6,708.76
3%  $      5,031.57
2%  $      3,354.38
1%  $      1,677.19

But, what if we cashed out our home? Given a conservative estimate of $200,000 of in proceeds, that’ll jump our sustainable distribution rates hugely, as shown below.

Portfolio Balance  $  367,719.00
4%  $    14,708.76
3%  $    11,031.57
2%  $      7,354.38
1%  $      3,677.19

At the 4% rate, we’re talking the Thailand lifestyle. You know, sell all your possessions and live in Thailand for the rest of your life. That could be cool.

. . .

The obvious takeaway is to keep saving. It’ll be fun to look at this blog post the same time next year to measure our progress. Hooray for progress! It’s about the journey!!!11111111