Not many people on this thread said they retired early on 4% or more (you were one of the few). I think the reason is many prospective early retirees came to the same conclusion I did - the 4% rule may have worked in the past for a 30 year retirement, but it's applicability to a 50 year retirement going forward is in serious doubt. Many posters in this thread have expressed the same doubts.
Well, I think the reason is that your logic and your conclusion are flawed. The reason is that many early retirees are tired of rehashing this perpetual topic and didn't bother to respond.
Luckily if you're not comfortable with the 4% SWR then you're the only one who has to work longer to pad your nest egg until you can sleep comfortably at night. Behavioral finance is at least as important as the math.
But I've been retired for nearly 14 years on the 4% SWR, including two awe-inspiring recessions, and I think that counts as "so far so good" for sequence of returns risk.
Let's rehash the assumptions that the Trinity trio made to simplify their computer simulations:
- 1% expense ratio on investments
- No Social Security
- No flexible spending
- Conservative asset allocation
So if you go by the 4% SWR, right away you're assuming that you throw away 100 basis points every year. In my case, with my expense ratio of about 24 basis points, I have an extra 0.76% on my side.
I don't know about you, but I expect Social Security to be available when I turn 70 years old in 15(!??!) years. That's about $12K/year for me and another $12K for my spouse. That's at least a quarter of our spending unless we're really blowing it out for travel.
Which brings me to the next point: we don't rigidly spend 4% + CPI every year. I don't think anybody does, and we can all cut back during a recession. There's another margin to let a portfolio recover from a bear market.
Which brings me to my final point: you'll never get a 100% success ratio, and statistics indicates that anything over 80% is ludicrous. Instead of maximizing your success ratio eliminate your failure rate by annuitizing a portion of your portfolio to provide a minimal standard of living. Maybe that annuity is SS, or maybe it's another type of deferred annuity, or maybe you buy a SPIA. But once you have that minimum longevity insurance covered, then you can invest in a much higher asset allocation of around 80/20 stocks/cash.
By the time I'm 70 I'll have lived through 29 of the 30 years. I'll let you know how it goes while I reset the calendar for a second 30-year retirement. I'm guessing it'll work out too.