David Blanchett, Michael Finke, and Wade Pfau published a January 21,2013 report claiming 3% is the new 4% safe withdrawal rate. This piece was picked up by several major news outlets, including CBS news, Forbes, USA Today, the New York Times, among others. The news outlets either completely glossed over or omitted entirely the fact that the authors allowed for a whopping 1% fee deducted from the PF
annually--a major error when you consider a PF can be managed at Vanguard for about 10 basis points (or less using Admiral shares, depending on the funds one owns).
In another thread, John P. Greaney's latest blog post was uploaded pointing out the fee assumption used in this research, and here it is in case anyone missed it:
Professor Wade Pfau: 3% is the new 4% Safe Withdrawal Rate (SWR)?
Why a pet peeve? IMHO, it's irresponsible for researchers to publish information which will grab headlines but not include the whole picture (i.e., with lower fees assumed, results would be different). As Greaney correctly points out, 3% is
not the new 4% when one manages fees responsibly.