I think most of the responders are missing the point of the post, and maybe we need a new one. In any rule-based, one-time-decision system tied to something fluctuating like market returns, the decision is really being made by the fluctuations, not the person who adopted the rule. Thus the risk is chronological, and based on how many fluctuations can possibly occur.
EarlyRetirementNow.com had a post that I can't find ATM about how a hypothetical saver is much more likely to retire during a raging bull market, such as 1999, the mid-1960s, or the roaring 20's than during the Great Depression, the 1970s, 2001, or 2009. The reason is simple; we're more likely to have a fat portfolio during bull markets. Bull markets are at some point followed by bear markets or big corrections, so the cycle is for lots of people to retire when their accounts are flush and then suddenly face a SORR event. Odds are, if we are close to retirement, it is because we are in a mature bull market (which ends within a couple/few years).
There is a case to be made that we should save as fast as possible and retire as soon as possible so that the window of time during which we are vulnerable to a SORR event is made smaller, and therefore our exposure is lower. I.e. a person who takes 20 years to save for retirement is more likely to experience a 40%+ correction/bear market at some time during their 20 year journey than a person who gets it done in 7 years. If in that example, the bear market occurs in year 15, the slow saver's retirement is set back potentially for many years, while the fast saver has already outrun the risk by having 8 years of portfolio growth prior to the event - perhaps they're set back to where they started when they retired. Thus the fast saver is less at risk of a correction in year 15 than the slow saver. Extrapolate this to the risk of corrections in years 12, 13, 14, 16, 17... and this adds up to a lot of cumulative risk. Plus, the fast saver who adds 15% to his account value each year through savings only loses a year in the event of a 15% correction. The slow saver with a 5% savings rate loses three!
There are 2 ways to read the story of Bill and Phil:
1) Bill loses because he retired too soon: Bill suddenly regrets quitting his job because he must now sell stock at cheap prices. Phil is better off because he got a Hawaiian vacation out of the deal AND paid his own living expenses from his salary for an extra year instead of withdrawing from his portfolio. But both end up at WalMart anyway. Had Bill known the correction was coming, he never would have retired.
2) Phil loses because he retired too late: Phil sacrificed his best remaining year of life for consumption and STILL didn't end up retired. Yes, both Bill and Phil are now WalMart greeters, and yes Phil has more money, but the amount of extra money Phil had - which he plowed into the markets right before they dropped - does not compensate him for the lost year. Phil figures he wasted a year working to end up right where his brother ended up. Also it rained on his entire vacation.
That said, I think it's simplistic to just trash the 4% rule without a better plan. One could construct the exact same scenario about a 3.25% or 3.5% "rule". And if the suggestion is we don't set a rule and just "wing it" - well that's a proven way to end up a 70 y/o Wally World greeter. If the plan is to live off of meme stocks until one hits the jackpot, let's go ahead and drag those risks out for public examination vs. the chronological risks of WR-base rules.
