I'm going to be the pessimistic party pooper and say no*. Right now the CAPE is sitting at 26.78 for the S&P 500. The Trinity study data only had that level once in its data set. If you turn those numbers around, the companies that make up the S&P 500 are only making a 3.7% profit for every dollar they're worth at the moment. Maybe those numbers aren't the whole story or maybe some economic magic will happen. Maybe I'm just full of excrement. Maybe I need new balls for my optimism cannon. I'm just personally a little uncomfortable using a SWR rate that's above what my little chunk of corporate America is actually earning. I still feel completely comfortable a bit over 3% and even more if the CAPE goes back down .
* 4% will probably work just fine if you think you will likely earn more than $0 post-FIRE or you think you have room to trim if the SHTF.
There are quite a few analyses (and threads discussing them here on the forum) that lead to the conclusion that CAPE is artificially high right now because of changes in requirements for how companies report earnings. And PE10 includes the 2nd worst economic crisis in 150 years, so it's also skewed higher as a result of that. If you look at just the current PE, and adjust it for the change in earnings reporting, it's much lower (something like 20). Still high historically--but PE has been steadily increasing for the last 70 years, so the historical average keeps growing. And there are many reasons to explain why PE keeps growing that also lead to the likelihood that it will continue to be historically elevated for quite some time, if not forever (the ease of investing in stocks via low cost diversified index funds, the widespread proliferation of retirement savings accounts, increased liquidity, more transparency of information about stocks, etc). The PE does give me some pause and I will proceed with caution.
I'm planning to use a 6% WR (still works most of the time historically). And if the market doesn't work out, be OK with cutting back or getting some fun jobs here and there. So yeah.
Are you planning to time it with the shiller ep10 bc most of the time that is successful it is congruent with the shiller pe being low. Planning for a 6% and retiring Jan 1 2008 is a bad idea regardless of how successful it was as a percentage over a large sample of pe ratios.
I think retiring 1/1/08 with a 6% WR would have worked out fantastically so far. S&P500 was 1400ish? As the market drops you are only spending from your bonds (which have appreciated during the panic). At some point you probably rebalanced from your appreciated bonds into super cheap stocks. Maybe even twice. And then your stock portfolio has tripled from the bottom in '09 (S&P 500 was 700ish). You probably cursed your timing a lot during 08/09. But you still had food to eat.
Specifically to your question, I have run a lot of scenarios on cFIREsim with my full strategy at work (including timing for a future housing change, college, SS, etc). Sometimes I throw in some income in later years (10 years post retirement, never more than 3 years of working, and at 1/2 my current salary). Sometimes I cut the college spending (I paid for my college--I'm OK having my kids do the same, and it might be better for their development if they do so). The years that I typically get failures are 1929, and 1965-70. With both of those, it's pretty clear early on that I'll need to either cut back or go back to work. Keeping a low fixed rate mortgage instead of paying it off early helps with 1965-70 because of the inflation.
I also have a optional spending fund that I subtract from my portfolio. The base budget is more than we spend now, so I'm confident we can live within it. But we probably will want to do optional things like travel. As a fall back I could also raid the fun fund. But I keep it separate for planning because I'd rather have it as an extra and not count on needing it.
And as another level of safety, our base spending is less than 2 full time minimum wage incomes. So getting enough work income shouldn't be too hard. And we already have some optional spending in our current spending, so we could cut back if needed. And in the worst case we'll probably only need 22 years post retirement for me to get SS if I take it early. So there are a lot of levels of safety in the plan.