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The 4 Percent Rule
What is the 4% Rule? It’s just a financial calculation and rule of thumb that helps you figure out how much of your retirement portfolio you can spend each month without ever running out of money. That amount is 4% of your retirement portfolio.
The 4% Rule and FIRE Finance
This rule is a foundational component of FIRE Finance. FIRE stands for Financial Independence Retire Early and proponents of the FIRE Movement rely on the 4 Percent Rule to help them plan their retirement spending.
Additional Reading on The 4 Percent Rule, the Rule of 25 and FIRE Finance
- Here’s more info on how and why the 4% Rule works.
- If you’re interested in FIRE, check out The Newbies Guide to Understanding FIRE.
- And here’s more on the Rule of 25.