The 2.7% Rule for Retirement Spending
Why Hacker News recommends it
HN cites it as the source for the argument that safe withdrawal rates should be lower than 4%.
What it is
Ben Felix examines whether the well-known 4% retirement withdrawal rule holds up, drawing on academic papers. He argues that a safe rate may be closer to 2.7%, especially for early retirees.
Recommended by 0 HN commenters across 0 different months, 2022 to 2025.
What Hacker News said
Cites cko · 2022-12 · on “Money, Money, Money (and Investing) (2015)”
For early retirees, Ben Felix has found the SWR to be closer to 2.7%. The oft-cited 4% depends on US data and studied 30-year time horizons. [this video]
Cites kwere · 2023-02 · on “My Fifth Year as a Bootstrapped Founder”
4% is specific to 60/40 US portfolio with 30 years horizon to not die poor at the end of it , a safer rate would be 2/2.5%[0] [0] [this video]
Cites throw0101c · 2025-03 · on “What We've Learned from 150 Years of Stock Market Crashes”
> What if your hypothesis is that the fundamentals have changed? There's been recent research on survivorship bias in market returns, especially with regards to the US: > Using international data, we quantify the magnitude of survivorship bias in U.S. equity market performance, and find that it explains about one third of the equity risk premium in the past century. We model the subjective crash belief of an investor who infers the crash risk in the U.S.~by cross learning from other countries. The U.S. crash probability shows a persistent and widening divergence from the implied global average. We attribute the upward bias in the measured equity premium to crashes that did not occur in-sampl