Video/transcript at M* with Kitces about how market valuation maters when calculating your SWR. Just a few numbers, but he's talking 4.5% with high valuations and 5.5% with low valuations, with the expectation that you will probably be able to raise your standard of living later in retirement if the worst case doesn't materialize. Not sure if it requires premium membership to view.
Valuation Matters When Choosing a Safe Withdrawal Rate
"So how I ultimately boiled that down in the research was to find if, in essence, that 4.5% withdrawal rate is a great starting point when you're actually dealing with a bad-valuation environment. But when you're dealing with merely average valuations, just things that aren't real bad, you should be talking about a number that's more like 5% than 4.5%. And if you're actually in a favorable-valuation environment, the number you should be talking about is more like 5.5%, and in fact there is a good chance you're going to be able to raise your spending further from there because you tend to get enormous bull-market runs that start in really low-valuation environment."
Valuation Matters When Choosing a Safe Withdrawal Rate
"So how I ultimately boiled that down in the research was to find if, in essence, that 4.5% withdrawal rate is a great starting point when you're actually dealing with a bad-valuation environment. But when you're dealing with merely average valuations, just things that aren't real bad, you should be talking about a number that's more like 5% than 4.5%. And if you're actually in a favorable-valuation environment, the number you should be talking about is more like 5.5%, and in fact there is a good chance you're going to be able to raise your spending further from there because you tend to get enormous bull-market runs that start in really low-valuation environment."