The 4% “Rule” is Wrong for FIRE—Here’s a Better Alternative

BiggerPockets Money Podcast

BiggerPockets

Investing, Education, Business

4.6 • 2.9K Ratings

🗓️ 6 May 2025

⏱️ 71 minutes

🔗️ Recording | iTunes | RSS

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Summary

For decades, the 4% rule has been the calculation every FIRE chaser has used to determine when they can retire early—risk-free. The math is simple: have a portfolio big enough to withdraw 4% per year to fund your lifestyle. But there’s one BIG problem with the 4% rule that nobody is talking about—a problem that could force you to work longer, ruin your retirement lifestyle, and put your portfolio in jeopardy if you don’t plan carefully. Tyler Gardner, former portfolio manager and financial advisor, is back on the show to share why much of the FIRE community may be wrong about this “rule.” Scared of not having enough to retire, retiring during a market crash, or being forced to be frugal once you leave the workforce? That’s precisely what we’re talking about in today’s episode. The 4% rule has become untouchable within the FIRE movement, but its hard-and-fast downsides may lead to your FIRE’s demise. Tyler shares what he thinks is the ultimate FIRE portfolio allocation, why he’s way more bullish on stocks and index funds than bonds, EVEN during retirement, and why target date retirement funds—often scoffed at—can actually help protect your portfolio once you FIRE. If you’re planning on retiring early with the 4% rule, think again. All of us have our doubts, and we’re sharing them today. In This Episode We Cover Why the 4% “rule” is WRONG for most FIRE chasers, and why withdrawing only 4% could be a mistake The new (updated!) FIRE number that most people should be chasing Hate your job and want to retire early? Here’s why you should find a better career (NOT quit) instead The ultimate FIRE portfolio allocation and why a target date retirement fund actually makes sense for many And So Much More! Links from the Show Mindy on BiggerPockets Scott on BiggerPockets Listen to All Your Favorite BiggerPockets Podcasts in One Place Join BiggerPockets for FREE Email Mindy: [email protected] Email Scott: [email protected] BiggerPockets Money Facebook Group Follow BiggerPockets Money on Instagram “Like” BiggerPockets Money on Facebook Subscribe to the BiggerPockets Money YouTube Channel! Connect with Tyler on Instagram Connect with Tyler on TikTok Your Money Guide on the Side Podcast Want to FIRE in 2025? How to Prepare for Early Retirement w/Emma von Weise Maximize Your Real Estate Investing with a Self-Directed IRA from Equity Trust Get to FIRE Faster with “Set for Life” Sign Up for the BiggerPockets Money Newsletter Find an Investor-Friendly Agent in Your Area (00:00) Intro (02:05) Is the 4% Rule Wrong?(06:05) This Saves Your FIRE (10:09) “One More Year” Syndrome(14:33) Healthcare in Early Retirement(16:34) Ultimate FIRE Portfolio Allocation(24:29) Include Real Estate?(29:49) Target Date Retirement Funds(36:25) Don’t Quit Working? (54:30) Find a Job You LOVE(57:02) Connect with Tyler!(58:30) FIRE Chasers Are Wrong! Check out more resources from this show on ⁠⁠⁠BiggerPockets.com⁠⁠⁠ and ⁠⁠⁠https://www.biggerpockets.com/blog/money-637 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠[email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	We are so excited to be joined by Tyler Gardner again for a follow-up episode.
0:04.9	In our last episode, we talked about the psychology of what drives people to retire early
0:10.3	and if our current societal work systems are broken.
0:14.0	And today, we're diving back in with Tyler, a former financial advisor who loves to push back
0:18.9	on the sacred tenets of financial independence.
0:22.0	4% rule?
0:23.2	Not one size fits all.
0:25.0	Early retirement?
0:26.4	Not so fast.
0:27.7	Portfolio management?
0:29.1	There's a lot more nuance than most fire adherents want to admit.
0:33.3	We'll get into all of this today.
0:35.3	This is a conversation you will not want to miss.
0:43.0	Hello, hello, hello, and welcome to the Bigger Pockets Money podcast.
0:46.3	My name is Mindy Jensen, and with me as always is my Swifty co-host, Scott Trench.
0:50.9	Thanks, Mindy.
0:51.5	Great to be here.
0:52.5	We always talk about our song, which is
0:54.8	financial freedom here on Bigger Pockets. Bigger Pockets is a goal of creating one million
0:58.4	millionaires. You're in the right place if you want to get your financial house in order
1:01.0	because we truly believe financial freedom is attainable for everyone, no matter when or where
1:05.4	you're starting, as long as you plunge headfirst, fearless. All right, today we've got Tyler back for part two. Last time we went
	...

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