How Much Money Would You Need to NEVER Work Again? (Four Percent Rule Explained)

Wanna retire early? The basic math behind the 4% rule isn't hard, but it's the details that most people struggle with. This guide to early retirement will show you how much money you need to retire early, but it will ALSO show you how to deal with inflation, withdrawal penalties, stock market crashes, and taxes in early retirement, so you can quit your job forever — without fear.

Further reading:

00:00 - How Much Money Do You Need To Retire Early?
01:21 - The 4% Rule
02:08 - How Inflation Affects Early Retirement
03:00 - Investments to Retire Early
05:11 - Withdrawing Continuously Without Running Out
06:12 - What If A Stock Market Crash Happens?
07:26 - How To Access Retirement Accounts Early
08:28 - Avoiding Taxes During Early Retirement
09:25 - Why We Don't Use the 4% Rule

#financialindependence #investing #retirement

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We're Lauren and Steven, and we followed some simple financial guidelines that allowed us to quit our full-time jobs forever by age 29. We created Trip Of A Lifestyle to share the knowledge that changed our lives for the better. All of our content is free.

Get rich. Work less. Travel whenever.

[nynick]

There it is. Should be tought in high school 💰

[MrEliminateDebt]

Great content, just subscribed. About 2 years into my corporate job journey, trying not to obsess over retirement but want to build best foundation I can.

[phan]

the secret to early retirement and low cost is noy having kids too early lol

[danielvona]

Hi! Really enjoy your content ! Two questions…the advice I read online preaches holding the bond portion of one’s portfolio in a tax deferred acct for tax efficiency purposes. However, if I’m aiming to retire in my mid 40’s, do I buck that tax efficiency advice and instead hold a portion of VBTLX in my taxable brokerage acct so that I could draw from it (particularly during stock market downturns) before traditional retirement age, making it easier to access than my tax deferred accts.? On a related note, if I’m aiming for a somewhat more conservative 2.75 %to 3 % max withdrawal rate do you think it might (I understand no guarantees obviously) sound reasonable, or completely nuts 🤪 to forgo bonds entirely and stick to the Wild Wild West 🤠 ride of a portfolio comprised of 100% VTSAX / VTIAX ? I’d also hold approx. 5yrs expenses in cash (online savings accts.) when I first leave my full time job to mitigate against the possibility of a dreadful sequence of return risk in the beginning. Thanks so much !

[bookitletsgo]

Hey quick question surely the 4% rule only applies if you plan on keeping the money invested and growing? How does that change if you have no intention of having money to pass on when you die?

[rebekkasmith]

So the percentages based on income tax brackets are 0, 15, and 20. So anyone with an income above 44, 625 would have to pay at least 15% on the capital gains. Wouldn't that pretty much destroy the 4% rule and isn't 15% kind of high? So there are not really low taxes besides the 0%?