After graduating with $75,000 in student loan debt, Ryan began a professional career in finance, aggressively saved and invested and became a self-made millennial millionaire in early 2019. He holds a Master's degree in Computational Finance, a Master's degree in Economics, and a Bachelor's degree in Mathematics. His two passions are investing and traveling.

10 thoughts on “The 2024 Unpopular Truth of the 4% Rule for Retiring Early

  1. Very insightful post. I previously was using 8% annual growth and 4% withdrawal for FI planning purposes. I was never necessarily using the standard $1,000,000 – but I was using 25x my annual expenses. After the COVID-19 crisis hit, it was the first time my net worth actually took a dip (usually our investment contributions make up for any market corrections, which leaves us with a constant upward trend). That was pretty scary! I’ve since started using a 7% growth and 3.5% withdrawal rate for planning. This post inspired me to maybe be even a little more conservative. Maybe 5-6% growth and 3% withdrawal.

    I really think I would have a hard time quitting my job and living off of a $1,000,000 investment portfolio in my mid 30’s. At the very least, I’d be open to slowing down the rate at which I’m investing, but not too sure about actually living off the investments. It feels risky if I’m still able to earn decent income doing something I enjoy.

  2. Ryan, I am in my late 30s and do not plan to retire until I’m 60 at the earliest. Currently have 20% of my Roth retirement portfolio in a total bond market index fund. Would you recommend from an overall low risk/return perspective that I liquidate a significant portion or even all of these holdings and put them in PGX instead (I don’t have time to research individual stocks)? The my existing bond holdings don’t look likely to see overall yields improve anytime soon in this long term low interest environment the fed has been messaging. Thanks!

    1. Well even though bond funds don’t pay much, they do offer a certain stability to a portfolio, a ballast if you will.
      However, given your age and long time frame, I do think that your suggestion is a better place for your money. For perspective, I am around the same age as you and I have never owned bond fund given the low yields and long time horizon of eligible working years. Also, while the FED has signaled that interest rate increases won’t be happening for a few years, there is always the risk that inflation forces their hand. This will depress bond prices, but also PGX. Morningstar shows that the effective duration for PGX is 3.5, which means that if interest rates rise 1%, the approximate loss of the PGX will be about 3.5%. This actually isn’t too bad though since the yield is north of 6%. To mitigate some of the interest rate risk, you might want to consider putting a portion in VRP, which is a variable rate preferred fund. The yield is about a 1% lower. (Oddly though the EffDur is 3.17 so it seems like many of their holdings are fixed-to-floats which reset after 3 years on average)
      Preferred funds have concentration risk in financials, since they issue the most but banks are a lot stronger post 2008. But any banking black swans could impact the fund. Also PGX has a few percent of AT&T. I don’t personally see that as a problem but a lot of people complain about their big debt load. Just things to consider.
      Don’t shift your portfolio all at once. Spend a few months moving a little bit over. A correction is likely on the horizon in the next month or two so you can allocate more if that happens and swoop in for the sales.

      1. Thanks, Ryan! Super helpful perspective! Would a 50:50 split between PGX and VRP make the most sense from a diversification perspective for money contributed to this preferred ETF bucket?

        1. I would probably start with 30% in VRP and 70% for PGX for the preferred bucket and then see what the Fed says in a year and throttle it up accordingly. If during the year the Fed starts commenting that inflation is worse than they were hoping then they will be pressured to increase rates and consider getting more aggressive in the VRP bucket. Ideally by the time they actually start increasing rates in an expected 2-3 years, you’ll be mostly in VRP instead of PGX. There’s no right or wrong answer, of course, without the perfect foresight. If a nice market correction happens soon I hope to buy a lot of VRP.

  3. C’mon, that’s not retirement! It’s also pretty dishonorable to plan on gaming the system as part of a “retirement plan.”

    I could not agree more with this statement…there is another popular FI website, and the writer talks about his $2MM in assets, yet he also talks about receiving subsidized internet, Obamacare health insurance subsidies, and other discounts because of his “low income”. One comment he made was that he was taught to get it while he can. He talks about all of the positive things he can teach his kids as he is FI…but gaming the system is not an idea I want to teach my kids. These types of statements were a big turnoff for me, and I quit reading his site. I recently found your site, and your take above is refreshing.

    1. Hey Ryan. I’m a fresh 21 year old and still am in college. I’ve started investing in quite a few individual stocks, especially tech stocks. I’ve also started investing in a few good ETFs. I’ve had rather great success so far, but am worried this might not last if something happens that’s somehow worse than the March 2020 stock market dip. How can I be better prepared to handle it effectively?

      1. Dean,

        Well the good news for you is that your current assets are small relative to your future assets since you are just starting out, so even if you lose 50%, while that would seem painful now, it will be a blip for you 20 years from now when you’ve amassed 10x as much wealth. However, check out these two articles where I discuss some “risk-off” ideas:



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