Re: Passive income and SRW
Your withdrawal rate counts everything you take out in a year, as a percent of your assets. It is not just the amount of 'principal' (I think you call it corpus) that you draw down.
Many people find a well-balanced portfolio generates 2 or 2.5% interest and dividends. That means that, for a 4% withdrawal, you are liquidating assets for the additional 1.5 to 2% you need to make up the additional amount. (Maybe more, since some of the interest and dividends may be earned in tax-advantaged accounts where you can't actually spend it yet)
The additional 1.5 or 2% might come to you conveniently through capital gains distributions in a stock fund, or you may find that when you do your annual rebalancing, you need to top up your cash/money market allocation for spending purposes. Unless every asset class is going down, you will likely be selling winners, or realizing some capital gains, in order to fund some of your annual spending. Is that "eating into the corpus or principal?" Since they are gains, I am not so sure, and thus have never really loved that terminology.
If you are just bridging a few years to Social Security, you may want to think about your SWR somewhat differently than those who are still a long way from SS. In other words, SWR matters over the long run -- it tries to tell you what amount you can safely withdraw over decades. If you just need to bridge some living expenses between now and 2009, for instance, after which point SS kicks in, then I would say your real issue is to look at how your withdrawals stack up as a percentage of the assets you'll have remaining post 2009. If that number is within a safe range, then I would say don't worry so much about the next few years when your withdrawal may be higher than a safe number.
Not sure if that is what you were asking, but it seems it would be relevant in your case.
ER for 10 years; living off 4.3% of savings (and a few book royalties ;-)