jIMOh
Thinks s/he gets paid by the post
you have to consider what risk is as small value has been higher return and lower risk than the market. While large fees will definitely hurt the safe withdrawal rate, low fees would be swamped by individual portfolio returns. Using a long term return should yield a better estimate than market less fees, especially with a nonmarket allocation and over near future rather than the distant past. Adjusting withdrawals for performance makes considerable sense, particularly over the long term.
Agreed on many levels:
1) keep expenses under control.
2) long term returns steady out significant deviations.
3) adjusting withdraws in down years makes sense.
Anecdotal comments
1) the goal is to maximize return, not minimize expenses.
2) My plan includes building up cash reserves equal to or exceed 7 years of expenses. The primary reason is to avoid the negative effects of a down year (or two or three or four...) early in retirement. Having a cash cushion which does not force me to sell at bottom is a major aspect of my retirement plan.