The 4% Rule Explained

The FI Planner

In this episode, your host Ben Martinek and co-host Andrew Bencivenga discuss the 4% rule and how being an entrepreneur may impact the withdrawal amount and therefore, the overall amount of money you need to retire.

What’s known as the “safe withdrawal rate” means that, according to the historical performance of the stock market, you can generally pull 4% of your portfolio’s value for 30 years without depleting it.

Of course, there are other caveats and assumptions, read more about them here: https://www.investopedia.com/terms/f/four-percent-rule.asp

• When is it “safe” to pull more than 4% from your portfolio? (07:50)
• Why your spending in retirement won’t be constant (12:30)
• What entrepreneurship has to do with your retirement savings (22:32)

Whereas traditional employment may limit your income (and therefore savings) at the market rate for your profession, entrepreneurs have the chance to create tremendous value - your imagination is the limit!

When you create a company (or two) that provides employment opportunities for others, brings solutions to the public, and generates income for you long-term, you may not need a certain portfolio balance or to depend on a 4% withdrawal rate in order to begin living a “retirement” lifestyle.

Read all the show notes, get the resources discussed, and follow our FI Entrepreneurship journey at https://bonafidefinance.com/

Bona Fide Finance:

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Student Loan Tax Experts:

Website: https://studentloantaxexperts.com

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