The 4% Rule: Is It Still the Key to Early Retirement in 2025?

The 4% withdrawal rule does not apply to early retirees since it's based on a 30-year timeline, not the 40+ years needed for early retirement. Guyton's guardrails approach offers a better alternative, allowing for 5.2-5.6% withdrawal rates by adapting spending based on market performance. • Guardrails approach uses flexible withdrawal rates that increase when markets perform well and decrease during downturns • Traditional 4% rule based only on S&P 500 and intermediate US bonds, while diversification across asset classes can increase safe withdrawal rates • First years of retirement often have high expenses (healthcare, education, travel) when your portfolio is most vulnerable • Bowling analogy: retirement planning with guardrails is like bowling with bumpers to avoid gutter balls • Business analogy: like a business owner, spend more when times are good, cut back when they aren't • Creating a "war chest" of safe assets reduces pressure on your growth investments during market downturns • Stress test your retirement plan against worst-case scenarios: market crashes, reduced Social Security, high inflation, living to 100 - Advisory services are offered through Root Financial Partners, LLC, an SEC registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult your CPA or attorney regarding your specific situation. The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal. Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements. Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial. Create Your Custom Early Retirement Strategy Here Get access to the same software I use for my clients and join the Early Retirement Academy here Ari Taublieb, CFP ®, MBA is the Chief Growth Officer of Root Financial Partners and a Fiduciary Financial Planner specializing in helping clients retire early with confidence.