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Comment by challenger22 | Hacker News Reader

Yep, married now, probably 1 or 2 kids eventually. To add a bit of nuance to my first post, growth assumptions of 6% per year on the portfolio mean that the eventual expense associated with children is probably already baked into the plan, given how conservative a 3.5% withdrawal rate is. Not too bad to worry about financially.

Reasonable insurance means anticipated medical expenses are limited to out-of-pocket maximums per year, which is reasonable.

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> growth assumptions of 6% per

Wow that is optimistic.

Edit: Yes I know US markets have done very well the last 100 years, but they were unusual circumstances. The next 100 are very likely to be different. Take a look Germany/France/Italy/UK/Japan, for more normal returns. Yes they are less capitalist - but US could be too given the way the main US parties are going.

Its just scary whenever I see people extrapolate recent returns. FIRE guys are generally dreaming -esp if they have no children.

Is it? Obviously if the market crash right as you retire, you're a bit screwed, but my understanding is that if you invested in a "total market" type fund continually, including straight in the middle of the biggest market crashes in history, over time you'd still make up around that range. ON a shorter scale (let say if you started around the housing crash), you'd get several times more.

> Obviously if the market crash right as you retire, you're a bit screwed

Actually this doesn't really matter if you live for 20-40 years after you retire.

It matters a little no? Every pay check you take out is a bigger percentage of the whole while the market is down, and when it inevitably rebound, you have much less to grow back into.

With that said, while I make sure to have contingencies in the case I do end up living for longer than expected, given the average lifespan of an American and the a mid 60s retirement age, "living for 20-40 years after you retire" is not something everyone can count on.

The other poster has a valid point: as you get close to retirement you shouldn't own too much stocks, but then if the market crash around the time you start seriously converting to bonds and stuff, you have to delay that plan and manage things a lot more closely.

In theory, yes. In practice, many people will flinch and sell, maybe even near the bottom.

edit: (But also, you should probably not own a ton of stocks near your retirement date)

U.S. stocks have appreciated at 7% (after inflation), on average, for over 100 years. And even if they don't, the 3.5% withdrawal rate has a 99% success rate if backtested on websites such as firecalc.com. Most of the time, this withdrawal rate leaves the investor with a portfolio worth several multiples of its starting value after 30 years.

In my reading, this seems like a pretty common assumption for the average annual return (looking at a period of multiple years averaged together), used often by people in the FIRE community (places like /r/FinancialIndependence, or bloggers like MMM).

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