HomeHowto & StyleRelated VideosMore From: Bloomberg

Retire Early With the 4% Rule

2061 ratings | 105318 views
At any age, it's daunting to think about retirement, much less about retiring early. There are, however, growing communities of people making ambitious and aggressive retirement plans that get them out of the daily grind in as little as ten years. On this episode of Good Money, we explain how you can retire early, or, if you want something more traditional, a little farther down the road.
Category: Howto & Style
Get embed code!
Text Comments (177)
Bloomberg (2 months ago)
Do you or someone you know have a plan to retire early? Let us know your strategy. (We just might use it, too.)
Krakaka Kippensoep (2 months ago)
@Harvey Lall you need is 50k and the braincells to put it into crypto, you only need 10k if you put in the effort to learn how it works
Harvey L (2 months ago)
What a crappy strategy. A better one is to have a min of 10mil net worth and then earn 500k in interest every year. Now you can retire.
Brendan B (2 months ago)
This was absolute trash piece of production
Krakaka Kippensoep (2 months ago)
just having crypto is more than enough to make anyone rich enough to retire
Anna Reyes (2 months ago)
One strategy to building real wealth is to recognize that the 4% infinite inflation that we are currently experiencing is caused by the creation of fiat currency backed by nothing of value via the quantitative easing mechanism of the Federal Reserve.
Lkng4 (28 days ago)
Imagine if you can advertise your skill set, through an online course, to just 10 people a week. Selling the course for $200 per person. Earning you $2000 a week, while doing it from anywhere in the world. Now that's financial freedom. Simple, easy and doable. It's time to level up. Are you ready to get out of the rat race?!
Nanix1991 (1 month ago)
Is the reporter gay? He moves like that!
Prince London (1 month ago)
Rajan Sachdeva (1 month ago)
No mention of Health Benefits/Coverage.
Todd Armstrong (1 month ago)
These people also make way above the average median income and do not have children.
lothean (1 month ago)
So who else is now an expert on the "4%" rule. .. not me.
Rasheed A (1 month ago)
Where do you live? Do you rent an apartment for life? Homes can be a major investment as well.
Fishin with Jim (2 months ago)
This does not apply to me there is always a job in hvacr always.We are loosing 60 to 70 to even 80-year-olds every in the hundreds and only getting 200 ish employees per state, whiles losing 400 per year. I own my own business btw at 28.
Javier Rivera 7470 (2 months ago)
aaah I'm already retired 😁
kimberly miller (2 months ago)
You shouldn’t feel like buying a house is a trap. It is not. I am VERY frugal and a minimalist. But..I am also a cat rescuer. So, those titles conflict with eachother. But point of the matter is that a house is a necessity to me. You can’t have a rescue in an apartment. At the end of the day do what makes you happy. You don’t have to fall into this idea that you can’t have a home and also retire early. You can retire early in a home you love if that’s the lifestyle you truely desire.
Trending business (2 months ago)
get out off debt, cut back like your homeless but you have a job,invest in dividend stocks first,spend your dividends to pay bills....and capital gains..
Mobashshir Kareem (2 months ago)
Hit like if u too didn't get any important information from this video 🤦
Promothash Boruah (2 months ago)
I retired too at 32 😍🇮🇳🙏
CitizenSlyder (2 months ago)
Wow. This video was like how I wrote discussion boards in college. Beating around the bush
Bryan A (2 months ago)
This video was badly made. Failed to properly explain the point and was so vague it didnt make sense
HakanPestoBoy (2 months ago)
Solidified the issue that planning for retirement is a cloudy, confusing process for many of us younger people
first Impression (2 months ago)
I think you guys live in a world of your own...In America, most workers can´t afford a $400 emergency. In Europe things are a litte bit less terrible but still most people are not making enough money so they can save much money...Let´s not even talk about the developing world because that is not your audience for sure...
Mark Hawkins (2 months ago)
The trinity study uses 30 year periods for the 4% rule. For retirement periods longer than 30 years, a lower safe withdrawal rate will have to be used.
Tobi Oyewumi (2 months ago)
But why would I want to retire at 31???
Emanuel Watson (2 months ago)
Isn't the Trinity study kind of outdated now?
SKuKuu HeRT (2 months ago)
On one side, living, on the other, saving... Ghee... I wonder which one I won't choose. Early Retirement!!!!
Corbeutr (2 months ago)
This video was not very helpful for me.
Dev_Pulsar (2 months ago)
Rubbish Video, Bloomberg I expected more from you. You failed to explain the principles behind the title of the video in any meaningful and simple way.
Ari Heiskanen (2 months ago)
Just skip to 0:55
Christopher King (2 months ago)
I retired at 28, just work like crazy, save tons, invest like there is no tomorrow. And my standard is even harsher than 4 %, mine is <1%.
Hannes productions (2 months ago)
4% is way to aggressive I think 1% or 2% is better.
damon (2 months ago)
@Graham Stephan
Michael Walsh (2 months ago)
There are exceptions to every rule, so there are some FIRE people with children, but in general being childless is so central to this strategy that it belongs in its own acronym, perhaps FINK - financial independence, no kids.
Phlegethon (2 months ago)
95% certainty the 4% withdraw works? so 1/20 chance you're bankrupt before you die and have to go beg on the streets?
FreshStuff (2 months ago)
1/20 chance you have to work a few years again. That's it. No one historically would have lost everything!
Phlegethon (2 months ago)
Yea except you have no health insurance if you're in America
tormaid (2 months ago)
Bunch of privileged asshats.
Eric P (2 months ago)
It should be noted that most of the online proponents of FIRE usually come from high paying tech jobs, invested a lot during the stock market crash to enjoy the massive 10 year bull run, and make money off their FIRE blogs.
Rxmbo (2 months ago)
Honestly this video is garbage In explaining its point. Head over to reddit r/financialindependence
Mr Nep (2 months ago)
Hampson (2 months ago)
you failed to explain the basic premise of the video in a meaningful way
RealLife Money - Weekly Financial Videos (1 month ago)
Agreed, it could have the math behind it and how it may work. It has the main idea behind it I guess...
Doctor RohitSharma (2 months ago)
L U C K End of story
Flossey Morphett (2 months ago)
nicewknd (2 months ago)
Don't feed the Religion Industrial Complex!
Walrave (2 months ago)
If you are earning enough to retire early your job is probably not bad enough to warrant retiring early.
trey 2K365days (2 months ago)
Nico Cevallos (2 months ago)
Where did you guys got the credit card swiper?
Quentin du Plessis (2 months ago)
0:40 independance?
Luis Treto (2 months ago)
I couldn’t retire early, I would get so bored without work!
Eric P (2 months ago)
Luis Treto they mean “financial freedom,” where you can do whatever you want without fear of money.
bought not built BNB (2 months ago)
You must really hate your job if you retire at 30. Just think what you would do 24 hours a day without a JOB
Well, I'll be damned. (2 months ago)
@bought not built BNB I'm passionate about many things, though you could never demand that I do *anything* for 40+ hours a week, and expect me to enjoy it. All I'm saying is, everyone is different. I'm a bit envious of people that really enjoy their jobs, to me they are among the wealthiest people in the world. Money couldn't buy *those people* happiness, but, it would for me, as I enjoy freedom.
bought not built BNB (2 months ago)
@Youtube Username 2019 yeah, that's fine but I think you could manage that with your work life. They obviously didn't chose their passoin of work if they want to retire that early
Youtube Username 2019 (2 months ago)
KAMALJYOT SINGH Traveling. Hobbies. Work out. Volunteer. They probably still do "work." They just do not do it for the money now.
Maitrayan Ghosh Roy (2 months ago)
*Housing, Transportation and Food*
Justin Reynolds (2 months ago)
The 4% safe withdrawl rate is under normal retirement circumstances and meant to safely last for a ~30 year period. For FIRE it needs to be ~3-3.5% or VPW based in order to avoid the risk of depleting your assets before death.
Borp (1 month ago)
Yeah but what if you offset your investments by writing a book on FIRE?
Against The Sky (2 months ago)
They don't actually produce anything valuable for other people.
外舞时缨 (2 months ago)
no kids? no wonder
CPM (2 months ago)
Bad advice while Bloomberg trying to make a $100 with these videos. This is ridiculous
CPM (2 months ago)
i hear Bullshit from bloomberg
Hendrik Janssen (2 months ago)
Nice video but the graph with the average retirement age in the us is a very bad graph... the horizontal lines indicate nothing and the line seems to be flat while it’s not
Unknown User (2 months ago)
Kids?! They forgot if you ever want to have kids in that formula
Walrave (2 months ago)
And health care
Aaron S (2 months ago)
You know you’ve internalized greedy capitalism too much when you’re scared of retiring early. 2:55
Max G (2 months ago)
I would like to hear what a japanese person would say, these people are living off the society.
James Love (2 months ago)
I live in Bloomsburg PA Lmao.😂
Arnik Popli (2 months ago)
Don't have kids... Problem solved
quad comparator (1 month ago)
Don't have kids and don't get sick.....ever.
Next Gen Games (1 month ago)
2K Doctor (2 months ago)
Maybe ur a man and ur bitch ass wife wants a child
Michael Wargo (2 months ago)
What’s wrong with no kids? Sounds peaceful to me
K K (2 months ago)
yooser naime (2 months ago)
I wonder what life was like on their home planet.
Joel Maners (2 months ago)
Not having kids helps too. Have you ever tried to finance your kids education?
Derek Lai (2 months ago)
Two words: trade school
waqasedhi (2 months ago)
You have to make video by amount calculation on chat sheets. Plz
The Modern Investor (2 months ago)
Buy Bitcoin. Its the easiest road to retirement. Refer back to this comment in 3 years.
H B (2 months ago)
Yeah at £9k a coin
ABC FX (2 months ago)
My diversification from profits and income. 5% savings 65% stocks 20% dividend stocks(retirement, reinvest dividends and don't touch.) 10% real estate or something else. Most important is cash flow should be at least 60%.
Mike Harrington (2 months ago)
The myth & temporary illusion of a comfortable retirement will not be an option for much longer in our ongoing sixth mass extinction. Planning how to find food & water, and how to die, will soon become of far more relevance to humanity.
Mike Harrington (2 months ago)
@bradleypariah Far from feeling sorry for myself, I enjoy & appreciate the gift of being alive. But if you think that everything is going to be just the same and OK in 10-15 years from now you have a nasty shock coming to you. Many will be living an existence where the only 'career' is finding the next food & water to survive - & it won't just be the equatorial hothouses. I recognize the ongoing reality & can make some adjustments, can you?
Geo Glyphiks (2 months ago)
I feel you. The IPCC report predicts 1/3rd of the economy will be destroyed by the ravages of the climate crisis. I’m here saving for FIRE, but there’s cognitive dissonance about doing so, as it’s unlikely to work out when the world is actually ON FIRE. Our own personal financial freedom is worth working for, but countless lives and the suffering of so many people and creatures are at stake and that’s worth working for even harder. I advise investing at least some of your time in political action, and get other humans to vote and virally engage in grassroots movements to activate others, as that’s the only thing that will ultimately move the needle on legislation to reduce carbon. That in turn may be the only way we can live the dream of retirement in a thriving world.
bradleypariah (1 month ago)
Well, if everyone else dies, there should be a lot more openings for the career you really want -- and if you're one of the poor saps that actually dies, then you don't need to worry about it!
K-rex (2 months ago)
That man probably has no student loans. Also im just gonna b like miyazaki. Never retire.
765 lb squat (2 months ago)
Borrow money then put every cent you own and borrow into bitcoin and you can retire a multimillionaire at age 25 like me. I have a ferrari, a beach house, women and living the dream all from bitcoin.
Well, I'll be damned. (2 months ago)
Almost like the lottery, except, if you lose the lottery, you aren't thousands of dollars in the hole.
Traditionalist (2 months ago)
or be like me, and one day planning on working just 6 months a year as a nurse anesthetist and making $100-150K and travel. Traveling and living so frugally doesn't sound like the lifestyle I want
E Ml (2 months ago)
Traditionalist you make $150k for injecting anaesthetics into peoples’ arms? In the UK that sort of job pays around £35k
Nkh (2 months ago)
Retire before 70 is just for cunts.
KILLERxPRO99 (2 months ago)
For FIRE to work you will need 4% withdrawal rate + inflation rate And that's if you are willing to have the same standard of living for the rest of your life so you may want to have a 4% withdrawal rate + inflation rate + a minimum of 1% And if you have an investment that can achieve that, then I would like to know
Jam Low (2 months ago)
No mention of children, stupid video
Jam Low (2 months ago)
@Ryan Hanrahan children aren't an investment (in an economic sense). I get the feeling you're as sad as the couple in the video
Ryan Hanrahan (2 months ago)
Children=bad investment
stevenjmuller1990 (2 months ago)
I'm assuming that is 4% ANNUAL* withdrawals. Two additional things to look into, vanguard index funds and annuities.
Nicholas Cherry (2 months ago)
I'm gobbling Fidelity smallcap growth up. Would do vanguard but fidelity is empolyer offered. Been on a tear lately, retirement at 35 sounds nice
Braylin Guerrero (2 months ago)
Real estate is better
Jimmy Costa Mendes (2 months ago)
Just achieve FIRE or whatever and still go to work. I mean who doesnt want a house that is paid for?? Then still go to work and ball the fuck out.
vedvyas gyansagar (2 months ago)
Amazing sheme
DylanTheory (2 months ago)
How realistic is this strategry?
Hendrik Janssen (2 months ago)
bradleypariah I feel sorry for you, your attitude and all the unnecessarily swearing will prevent you from further investigating the matter yourself, effectively making sure that you’ll work until 70.
Hendrik Janssen (2 months ago)
Read on the mister money moustache blog. It’s realistic (it’s just math!) for you to drastically cut expenses. What you probably don’t realize yet is the power of investing. So cut your expenses and start investing.
bradleypariah (2 months ago)
Easy! Just be the top of your class, have no student debt, work for a billionaire, and save up about a million dollars so you can live off the interest without your balance dwindling! SO FUCKING SIMPLE. Let's see, to retire in nine years, simply get paid $111,000 per year and don't spend a single penny the whole fucking time. No food, no water, no home, no car, no nothing. Save it all, and in nine years, Boom! You're retired! Just like the lying asshole in this video! Seriously though, start a 401k.
(2 months ago)
With the collapse of pensions, government debt, inflation and low wage growth, post baby boomer generations will need to work until death.
Eric P (2 months ago)
7007007 vintage people have to learn to invest for themselves. Don’t give it all to some fund manager to eat you alive with fees.
Jacob Job (2 months ago)
7007007 vintage Many people will need to work well into old age, but many also have the opportunity to retire early or at a traditional retirement age if they follow a decent paying career path, save and invest intelligently, and live within their means instead of living a life full of consumer debt.
YourLastCupOfSorrow (2 months ago)
I expect to retire at 85, at least I won't need a lot
Keeks Seven (2 months ago)
FNM my man
ATS_ (2 months ago)
Are you 84 now? lol
chris baranoski (2 months ago)
The only thing I don’t like about the FIRE movement is no one is doing it right in my opinion. The current model doesn’t work, cause it depends on a saved amount. As where If someone wants to retire and focuses on multiple income streams they could walk away making the same or more than they do at their job and live better.
Nicholas Cherry (2 months ago)
Let's banter Chris. I'm a fire advocate and saving 75% of my income with plans to retire at around 35. Think of it like this, your investment into a business would be the equivalent to my investment into a stock account i draw 4% from. The only difference between our investments is the amount of market risk you take and the amount of return you want. Having multiple income streams (I'm assuming your're talking about businesses) is more volatile than holding 3 sold etf funds, so you'll actually own hundreds of companies and your risk will be spread much wider.
Burninmyleather (2 months ago)
Baby boomers are the Worse! Stop taking wealth advice from Mommy and daddy what do they have really?
bradleypariah (2 months ago)
I'm over 40. You'll understand if I don't take financial advice from a kid who thinks it's ironic to have a mustache. You literally can't retire in 9 years if you don't own your home, because your rent will still be costing you $1K a month. You can't travel either if you can't afford a bed for the night. You buy a home so you don't have to pay rent once you retire. If you get so old that your retirement funds start dwindling, you can always sell your home and move into a retirement community with the money. Don't plan on Social Security being enough. Invest at least 6% of every paycheck into a 401k (START RIGHT NOW), and work for a company that matches your contributions. Seriously. You could be a janitor at a hospital, and you'd have a brighter future than most other millennials. Talk to a financial planner, tell them how much you make, and they'll tell you how much money to put away and for how long. DON'T OPEN CREDIT ACCOUNTS. PAY CASH FOR USED CARS. COOK YOUR OWN FOOD. That's how you retire. Stop treating it like it's rocket science.
Henry Baker (2 months ago)
I assure you, my mustache exists entirely in earnest 😊
Ng Yee Tat (2 months ago)
Do nothing and you end up in a grave early
Coca Cola (2 months ago)
buy bitcoin
Front Runner (2 months ago)
For It is Written... 'Seek FIRST... The Kingdom Of Heaven...and ALL these things shall be added unto you!'...Jesus
Jonathan Osborn (2 months ago)
This video told me nothing more than basic “sagacious” advice. The statements were partially shrewd, but then said you can still buy coffees and go out to eat. WTH? How much did that couple earn for those 9 years? How much did they put away? Did they purchase rental property or invest in stocks? Maybe even just CD’s?!!!!
Heather Edwards (1 month ago)
@Eric P pla
Heather Edwards (1 month ago)
@Derek Dilger yplay Plày
Heather Edwards (1 month ago)
@Eric P , hi
Heather Edwards (1 month ago)
@Eric P by
Heather Edwards (1 month ago)
@Eric P I think by by
pgreenx (2 months ago)
4% rule only provides 95% confidence for 30 yrs. doesn’t work for retirement periods >30 yrs
Toastie (2 months ago)
If you invest wisely the rest of the other 96%, then you can easily make up for the 4% that you spend and likely gain even more, that is how many rich retired people get even richer through their passive income.
TheAstronomyDude (2 months ago)
Eat rice, retire early.
Francesco Gallegos (2 months ago)
Here's the actual formula for finding how much to spend when retired: spending rate = long term portfolio yield - inflation rate (You want to make sure your portfolio grows with inflation so that it does not lose value; also, the larger the portfolio the larger the yield) P.S. If a portfolio's return is 6% and inflation is at 2% then a spending rate of 4% makes sense
Well, I'll be damned. (2 months ago)
To me, you should be saving some of that 4% you are withdrawing, as well. If the market were to crash like it did back in 2008, and you go to withdraw your 4%... I guess that's why they say there's a "95% certainty", lol.
Alistair Razi (2 months ago)
Retirement will be mirage after coming economic collapse.
Cat Carrillo (2 months ago)
That ipad on his lap gives me anxiety
Claudio Ballermo (2 months ago)
J P (2 months ago)
1:29 wtf is wrong with this head guy, also I’m all in bitcoin 25k into the hole
Anonymous (2 months ago)
3:56 Vaguest investing advice I've ever heard lol
Gene Khlopov (2 months ago)
The most common as well.
Anonymous (2 months ago)
Just to point out, in order to live off the 4% rule, you'll need to have 25x of your average yearly expenses invested (in index funds). By saving 25% of your income, this could easily be achieved whilst in your 30s. I recommend the 'Mr Money Moustache' blog for more on early retirement and financial freedom.
Well, I'll be damned. (2 months ago)
With my current income, and a 6% ROI, that would take me ~28 years.
Nikki (2 months ago)
thank you I think that isn't mentioned enough
Qayray (2 months ago)
my current strategy: blow it all and hope I‘ll make a lot more in the future 😁
vietimports (2 months ago)
It’s basically confirmed that like 80% of Americans will work until they die
audiovideotweaker (2 months ago)
Buy Bitcoin
Сара Керриган (2 months ago)
Third comment
Zachary Laid Finding Freedom (2 months ago)
Minimize spending Maximize earnings Invest the difference Withdraw 4% of investments
Alex Krause (2 months ago)
@Jimmy Costa Mendes Australia is even more expensive. Bad idea. I wanna retire to China :) but I am 20 with only 3K savings and I am starting college this fall, so those savings are not gonna grow, but decrease instead ;)
majmunOR (2 months ago)
@Gene Khlopov Thanks, this is what the video failed to explain.
Well, I'll be damned. (2 months ago)
@Sublunary World Depends on where you want to live. Go live in a rural area for much, much cheaper.
Sublunary World (2 months ago)
@Well, I'll be damned. the price to live on land is and has been for quite some time ... 1 lifetime of labor for a place to put your stuff and sleep at night weather you rent or buy ..with this much land available it is over priced to the point of just being slavery ...
Isaiah James (2 months ago)
First comment