Business Week has a block of retirement articles on their website this week. (Again, my apologies if the site is restricting these articles to subscribers. My cookies can't tell the difference. But this is an interesting article that's worth retrieving from the library or their online magazine database.)
In this article they claim that there's not much of a risk premium to the 4% SWR. In their words, a paragraph above Table 4, "Increasing the expected returns and risks does little to alter this 4% rule of thumb."
I can't tell if they're claiming that (1) 4% or less has the best survival for all sizes of portfolios, or if they're trying to say that (2) it's better to have lower risk, even if it doesn't keep up with inflation. I think that they're only considering a 20-year period so inflation erosion won't be an issue, but then I'm very good at disagreeing with things that I don't want to hear.
It also bothers me that S&P's smart financial analysts are apparently substituting the term "average" for "median".
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