It still appears that the 4% rule works out, based on a recent review of Kiplingers
The article provides a lot of “qualifiers” and notes that this is a backwards looking analysis (i.e. its looking at past performance, and you can’t guarantee it will work). Still, the original 4% analysis done by William Bengen, covering a wide range of 30-year periods, including the great depression.
From Investopia: “The 4% rule was created using historical data on stock and bond returns over the 50-year period from 1926 to 1976. Before the early 1990s, experts generally considered 5% to be a safe amount for retirees to withdraw each year. Skeptical of whether this amount was sufficient, financial advisor William Bengen conducted an exhaustive study of historical returns in 1994, focusing heavily on the severe market downturns of the 1930s and early 1970s. Bengen concluded that, even during untenable markets, no historical case existed in which a four percent annual withdrawal exhausted a retirement portfolio in less than 33 years.”
My personal opinion is that the 4% rule is still valid, and you can probably go 4.5% or even 5% if you are sure to invest in equities.
What is your opinion?
Mr. 39 Months