Question 1

What is the 4% rule for retirement?

Accepted Answer

The 4% rule suggests withdrawing 4% of your portfolio in the first year of retirement, then adjusting for inflation each year. Based on the Trinity Study, it historically sustained a 30-year retirement in most market conditions. FI Calc lets you backtest this against 150+ years of real data.

Question 2

How does historical backtesting work for retirement planning?

Accepted Answer

Historical backtesting runs your retirement plan against every possible starting year in history (1871 to present). Each cycle simulates your portfolio through actual stock returns, bond yields, and inflation. This shows how your plan would have performed across wars, recessions, and booms.

Question 3

What is a safe withdrawal rate?

Accepted Answer

A safe withdrawal rate is the percentage of your portfolio you can withdraw annually without running out of money during retirement. The exact rate depends on your retirement duration, asset allocation, and chosen withdrawal strategy. FI Calc tests 15 different strategies to help you find the right approach.

Question 4

What is the FIRE movement?

Accepted Answer

FIRE stands for Financial Independence, Retire Early. It focuses on aggressive saving and investing to build a portfolio large enough to sustain your living expenses indefinitely. FI Calc helps FIRE planners test whether their target portfolio and withdrawal strategy will last.

Question 5

What is Monte Carlo simulation for retirement?

Accepted Answer

Monte Carlo simulation randomly resamples historical market years to generate thousands of possible retirement scenarios. Unlike historical backtesting which tests every actual starting year, Monte Carlo creates synthetic sequences that may never have occurred, giving broader coverage of possible outcomes. FI Calc also offers stress testing, which forces bad market years at the start of each simulation to model sequence-of-returns risk.