I’m in a place where I’ve spent the last 10-12 years saving like a chipmunk before an ice age. I’ve been fortunate and have a decent chunk saved up. I’ve got another 15-20 years of work ahead of me but want to find a bit more balance between saving and living during that time.
How does one forecast retirement targets vs current value? In other words, how can you calculate when it’s ok to decrease retirement savings without compromising too much?
I think the 4% rate is generally only safe if you’re retiring much later (i.e. ~65). I think retiring at 50 will require a much safer withdrawal rate without exposing yourself to too much risk
I believe the original study (Trinity Study) that determined the 4% used a 30 year time horizon. One would have to adjust to their own risk profile and assumptions.
I mentioned ERN’s SWR series because of that. He simulates longer time horizons and I believe finds 3.5% is a more conservative number, but everything will vary by individual.