Is the 4% Rule Dead?

BiggerPockets Money Podcast

BiggerPockets

Investing, Education, Business

4.6 • 2.9K Ratings

🗓️ 21 March 2025

⏱️ 42 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Is the 4% rule dead? Most FIRE-chasers are using this retirement rule completely wrong, and it could cost them their financial freedom. With stock prices falling and many Americans fearing another recession, now is the time to tighten up your retirement portfolio and ensure you can survive if stock prices correct or crash. If you get this wrong, you could delay your FIRE for years or have to go back to work mid-retirement. The 4% rule is one of the most bulletproof retirement formulas. It’s simple: Build a portfolio from which you can comfortably withdraw 4% annually. Need $40,000 per year to live? Your FIRE number is $1,000,000. Need $100,000 per year? Then you’re looking at $2,500,000. This math has been checked, double-checked, and triple-checked to withstand even the greatest economic depressions. However, most people have their portfolio set up WRONG, and it could put them at significant risk. So, how do you ENSURE you can retire (early) with the 4% rule? What hedges should you make in your portfolio so your wealth stays afloat even as the economic tide starts to turn? What are Scott and Mindy doing now to prepare for a rocky stock market? Don’t miss this one—it could cost you your FIRE! In This Episode We Cover The 4% rule explained and whether it still works in 2025 and during market downturns Why your FIRE portfolio is WRONG, and it could be at massive risk right now How to prepare for an economic downturn to ensure you stay FIREd or on the path to FIRE What Scott is selling and buying right now to protect his wealth (will his strategy work?) Alternatives to the 4% rule that will protect your retirement portfolio even during the greatest of depressions 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 BiggerPockets Money YouTube Channel BiggerPockets Real Estate 1,095 - Scott Trench: How I'm Protecting My Money From “Irrational Exuberance” BiggerPockets Money 120 - Are FIRE Naysayers Bad at Math? Yes. with Michael Kitces The Rational Investor’s Case Against Bitcoin Dow Jones - DJIA - 100 Year Historical Chart Try REsimpli, The Only All-In-One Real Estate Investor CRM Software That Helps You Manage Data, Marketing, Sales, and Operations 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) Is the 4% Rule Dead? (04:39) You CANNOT FIRE with This (11:42) How to Prepare for Downturns (21:12) Assets That Are At Risk (23:17) What Scott’s Buying/Selling (28:29) Alternatives to 4% Rule Portfolio (34:21) Do You Trust the 4% Rule? Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-619 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

Click on a timestamp to play from that location

0:00.0	Hey, Scott, is the 4% rule dead?
0:02.3	Nope.
0:03.0	All right.
0:03.5	That wraps up this episode of the Bigger Pockets Money podcast.
0:06.3	He is Scott Trench and I am Minnie Jensen saying, see you later, alligator.
0:09.9	Or saying, ha ha, just kidding.
0:12.2	We actually have a lot more to talk about about this.
0:19.2	Hello, hello, hello, and welcome to the Bigger Pockets Money podcast.
0:22.3	My name is Mindy Jensen, and with me as always is my market-conscious co-host, Scott Trench.
0:27.6	Thanks, Mindy.
0:28.1	Great to be here.
0:29.0	As always, great timing with your intro.
0:32.1	Bigger Pockets has a goal of creating one million millionaires.
0:35.0	You are in the right place if you want to get your financial house in order because we truly believe financial freedom at the 4% rule is attainable
0:41.2	for everyone no matter when or where you're starting. And the math still holds even here in the
0:46.2	scary conditions at the start of 2025. Scott, that intro was a little reminiscent of our show
0:51.9	with Michael Kitsis way back in the very beginning of COVID
0:55.3	in March of 2020, where we asked him that same question. Is the 4% rule dead? And he said,
1:01.1	no. Scott, for those who are not familiar with the 4% rule, what is the 4% rule? What are we talking
1:08.7	about here? Sure. So the 4% rule is an attempt by a deep body of financial analysis to answer the question, how much money do I need in order to retire? And the idea is that a portfolio that is invested a specific way with a, for example, 60-40 stock bond allocation, although
1:30.3	that range can vary between 70-30 and 50-50 stock bonds. A portfolio invested that way in major
1:37.1	index fund investments, for example, historically has never run out of money over a ensuing 30-year period.
	...

Transcript will be available on the free plan in -1 days. Upgrade to see the full transcript now.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from BiggerPockets, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of BiggerPockets and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.