How much is enough?

The 4% rule is one of the fundamental numbers of the FIRE concept. From a financial point, this rule makes total sense.

However, I wonder if for someone retiring in his 30’s this number is too low. My arguments:

  • It’s highly likely that you will make money at some point (hobby, because you are bored, ect)
  • If the sequence of return is bad at the beginning, you can go back in the job market as you are still young
  • It’s highly likely that your ending balance will be much more than your starting balance
  • You can use geo arbitrage to reduce spending in case of a bad sequence of returns

Mmm… I would have said the opposite. The younger you are, the longer time span (and lifestyle modifications) you have to face with your savings and the less you’ll have accumulated in standard retirement plans (AHV, pillars…). I’d feel to be much more conservative if I were planning to FIRE that young.


I’ve been thinking about it, lately. My point of view is to have 2 target numbers:

  1. How much do I need to launch a self-employed venture that would fit my desired lifestyle (type of activity, occupation, stress level) and still retire comfortably ?

  2. Standard FU#: How much do I need to never ever again have to work for a cent in my life.

I’d stay conservative with something between 3%-3.5% SWR for the second. The first is calculated with expected income, expected 2nd/3rd pillar plans and saved amounts, time needed for a successful launch of the venture and related expenses and a safety margin. I’m using a “perpetual” 3% SWR for expected withdrawals on invested amounts.

I tend to be conservative when I make my plans and aggressive when I’m executing on them, though.

ETA: Big ERN from EarlyRetirementNow has an awesome serie on the topic: The Safe Withdrawal Rate Series – A Guide for First-Time Readers – Early Retirement Now


4% rule works for 30 year time horizons, but if you retire early, you are probably looking at 40+ years. So I would go down to 3.5%.

From a purely economic point of view, yes, maybe.
But if you take into account other factors as I mentioned before, would it still be the case?

@Wolverine I think I’ll follow this idea.

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My biggest issue with all of this is how can I keep my swiss “privileges” while abroad.

You can use the 4% rule for 30 years, then spend 10-20 years somewhere where you can survive with a 1% rule. Then fly back. The only problem I see is the additional health insurance that you will lose and the housing problem, since you probably have to give your apartment/house away while abroad.

I think it really depend on the personal situation, it’s difficult to make general statements.

  • Single / married / with kids ?
  • Strength of ties to your country (parents, other loved ones) ?
  • Entrepreneurial mindset/attitude ?
  • Personal risk aversion ?

These factors are going are going to impact in some way the arguments you listed and their feasibility as an instrument to possibly reduce your “number”.

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apply for citizenship in advance ? (in case you do not have CH passport)

What do you mean here ?

For this we’re currently thinking about the possibility of leaving the house to one of the kids (if they are interested) and let him/her pay the mortgage. Otherwise sell (we won’t need that size once we are only the 2 of us) and maybe buy a small apartment to keep as a base in CH.
Renting it or not when you are not there really depends on personal taste (some have issues with it, it might be the case for us as well) and the $$ availability… :slight_smile:

I am Swiss. The privileges I talk about are:

  • additional health insurance: you might not be able to subscribe to one once you come back. They can refuse you.
  • pension : you don’t get what you don’t pay…

I might have just written them in the first post :slight_smile:

Maybe the solution will be to never go away for more than 6 months, but then you’ll keep all the basic expensive stuff that raise the withdrawal rate from 1 to 4%, which are taxes,rent and health insurance.

Maybe you can keep paying the additional health insurance even if you are abroad? Not sure if it works or is even legal.

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