Trey on Nostr: The 4% rule was built for portfolios of stocks and bonds, not a portfolio with a ...

The 4% rule was built for portfolios of stocks and bonds, not a portfolio with a large bitcoin allocation. That doesn't make it useless. It means the withdrawal rate can't be changed by looking at expected returns alone.

A higher long-term return could reduce the portfolio you need to fund your expenses. But bitcoin's volatility increases sequence-of-returns risk: a deep drawdown early in retirement can force you to sell more bitcoin when the price is low, leaving less to participate in a recovery.

So the first step isn't choosing 4% or 8%. It's writing down what you'll do during the first bad market after leaving full-time work. Which asset funds your spending? How far can you cut expenses? Would you take part-time income instead of selling into a drawdown?

A bitcoin retirement plan should be judged by how it handles a bad first few years, not only by the average return you expect over decades.