Listener Sherry asks a good question: How do large, oneoff expenses (like a new roof, new car, etc.) fit in the 4% Rule?

James explains the concept of the 4% Rule and its limitations while demonstrating how it can be an effective guideline in planning and forecasting retirement success.

He addresses the importance of anticipating oneoff expenses and, depending on your portfolio withdrawal rate, using sinking funds to get a reality check on where you stand.


Questions answered:
Are oneoff expenses covered in the 4% Rule?

Who should be concerned with creating sinking funds for oneoff expenses?

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⏱Timestamps:⏱
0:00 Sherry’s question
3:19 Shortcomings of the 4% Rule
5:30 Look at income and outcome
6:58 Portfolio withdrawal rate
10:51 Example of no margin
13:02 Sinking funds
16:57 New reality check
18:49 Consider the duration of expenses
20:17 The wrapup

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