But isn't using a lower WR just one part of a "safer" plan?
You really need to:
1. Aim for a sub-4% WR.
2. Overstate planned expenses by a lot.
3. Understate income such as pensions or SS by a lot.
4. Figure on living to 120.
5. Assume some black swan event (divorce, lawsuite, uninsured disaster, deserving child desperately needs financial help, etc.) hits you for all or most of your FIRE portfolio.
6. Begin with a huge "cash buffer" you don't include in portfolio survive-ability calculations.
7. Plan on a higher income tax rate in the future.
To some extent I do most of these, but not to an extreme.
1. Yes.
2. No, figuring < 4% WR covers this
3. SS yes, I take a 35% (up from 25%) haircut on that. Pension, no.
4. Not 120. At 94 my VPW plan gives the highest withdrawal, after that I start taking less. Should be fine to at least 100.
5. Not sure I call these black swan events. But to address those, I'm not married and unlikely to ever remarry. I have umbrella insurance. I've factored in gifting the max I can for my son without having to report. I'll deal with any others I hit if I have to but there's no way to plan for an event that wipes out everything.
6. No
7. I use the old tax rates that are set to resume in 2026, and figure all of my SS will be taxed rather than 85%.
Some people sleep better with a paid off house. Some people sleep better with a nearly bulletproof retirement. I'm in the 2nd group.
And so on and so forth......... FireCalc will account for all the above if entered (or not entered) as appropriate. It's belt and suspenders ya know!
IF is the key here. I see some potential retirees talk about tracking their last two years of expenses and using that, without taking into account that they didn't replace their car, make large home repairs, take a big vacation that they'd like to do when they have more time. FireCalc is only as good as the data you enter.
My own opinion is that the biggest threat to a (more or less) 4% WR turning out to be a SWR is your AA. I question how many folks really hold to the AA they enter into FireCalc. For example, some of our forum members feel they have "won the game" and hold a zero, or near zero, equity AA. In their case, the standard "4% for 30 years" advise is totally off the table. It's not wrong to hold zero equities, but be sure you understand the outcomes that would have produced historically through FireCalc and decide if you want to continue to assume the future will behave similarly to the past.
You may be right. My sense of the "won the game" people is that they could live on 2% or less. I never got the sense that someone taking 4% + inflation has gone all cash. I could be wrong. Where I think AA issues come is that some will panic sell after a crash, and then not get back in after a recovery. Or any other bad market timing choices.
I was going to say that underestimating expenses is the biggest threat in retirement, but I think you're onto something with veering away from their AA.