FIRE.182 4% Compass vs GPS

Where are we?  Where are we headed?  Are we there yet?

In the space I hang, many money-wise people are planning a great future—and hopefully living a great today while knowing they’re on track for an AMAZING future.

It seems that the foundation—or dogmatic guiding—principle of FI is the 4% RULE.  If you lightened up a little, it may be considered the 4% rule of thumb.  To me, a 4% withdrawal rate is just a guide to get closer to the starting point.  But then, I’m pretty risk-averse.


Maybe 4% is a great guide to give someone a general direction that they’re heading, similar to a compass heading—north is north.  Realistically, you could be anywhere on the planet but heading in the correct 4% direction.  There are so many paths to take once you are FI.  The route/destination ahead of you may not be clearly defined, so a general direction may be lacking a highly successful ending point.

GPS Navigation

After nearly a decade beyond my career, while living a LifeInFIRE, I wonder if a retirement GPS+map-route with step-by-step directions will show a clearer ending location.  A GPS will show exactly where I’m at (I love being a blue dot on “the blue planet”) and if combined with some computer programming, I can see a detailed route—or multiple routes—to attempt to reach the destination I choose.

Which to use?

Do you need a general direction guide or a detailed step-by-step guide?  This decision is probably based on either your stage of gathering assets or your personality and desire to dig deep into the details.

The risk of your FIRE going off the rails with a long 40-50+ year post-career life could be drastically increased with a set-it-and-forget-it rule of thumb based on historical data.  It is also possible that your end or plan would prove you left TONS of money on the table (in your accounts) that you could have used to make life/lives better.  Of course, it’s too hard to tell in year one.  It’s important to monitor everything (you can think of) along the way.

When possible, make a U-Turn

If you design a plan of spending for your future and the target for your end-of-plan balances, then you should check in along the way.  When traveling to new places, it’s often my GPS lady tells me “When possible, make a U-turn.” 

It’s important to monitor how your cash flow, account balances, and assets are holding up.  I believe the goal is to fund your lifestyle and desires.  Spending, Sharing, Giving, etc.


If you have a destination in mind, using today’s tools, would you just use a compass, or would you use a turn-by-turn GPS…or are you a paper map person?  

Side note: I used to call the GPS a “marriage-saver” when we were on vacation in a new city.  So many heated discussions over the paper map from the car rental counter…  I don’t want to have those stressful discussions about retirement funding.

*** Nothing in this article is to be construed as financial advice.  I am not a financial planner, nor do I pretend to be.  You should always consult your own professional when seeking advice. This post is not a piece of literary mastery, just a random thought I had.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.