My favorite analysis of this type is the Early Retirement Now. https://earlyretirementnow.com/safe-withdrawal-rate-series/
The spreadsheet link is about half way down the page (part 28).
I second the value of Early Retirement Now. The ERN spreadsheet is now available with a simple user interface at https://saferetirementspending.com/ - still free.
William P. Bengen is coming out with his new book August 5th.
A short blurb from his web site:
It all began with the first article I wrote, for the Journal of Financial Planning in October of 1994, "Determining Withdrawal Rates Using Historical Data." Not a very sexy title, eh? By way of explanation, I was writing for my fellow financial advisor professionals. At the time, I had no inkling of the broad public interest that my paper would provoke.
In that article, I presented my finding that a 4.15% initial withdrawal rate from a tax-advantaged account (such as an IRA or Roth IRA) had never failed to allow the account to last for at least thirty years. My research was based on reconstructing the investment experience of retirees from 1926 to date. I didn't use "Monte Carlo" or other modeling techniques; I used historical data for investment returns and inflation.
In that paper, I didn't mention any rule or suggest that all retirees use the 4.15% number. I viewed the paper as a preliminary effort, using some simple assumptions, with more and deeper research to follow.
Shortly after the paper was published, I began to hear of references to my "4% Rule," which surprised me. Apparently, our culture's powerful forces of simplification dropped all the digits after the decimal place and converted my "finding" into a "rule." I was initially a little uncomfortable with this, especially when criticism was directed at the "rule" (and implicitly, myself) as being too conservative!
What use, then, is the "4% Rule"? If you're very conservative, the 4.15% withdrawal rate can provide comfort that it has never failed over the last hundred years. This period included hot wars, a cold war, recessions, a depression, periods of high inflation, and COVID-19. Could the future bring even worse? Possibly, but let's not hope so!
Don't be surprised, though, that if you use the 4% Rule, you accumulate considerable wealth as you age. You're not likely to encounter the adverse circumstances experienced by the late 1968 retiree, which caused rapid depletion of their investment portfolio. Consequently, the money you could have spent earlier in retirement will pile up and compound into a massive legacy. Perhaps you're comfortable with that outcome. If so, the "4% Rule" is made for you!
I should note that since 1994, my research has grown in breadth and sophistication, and the "4% Rule" has morphed into the "4.7% Rule." In my book, "A Richer Retirement," I mention techniques that effectively increase this to 5%. However, don't look for much further expansion from that level; we seem to be reaching the point of "diminishing returns."
https://www.bengenfs.com/the-4-percent-rule/
