We just don't want to think 'oh we have now got 25x saved in the fund' but actually the fund value has increased dramatically by 50% in the 6 years ( so we have actually only added somewhere around 17x) and the value then drop for the next few years (to an average of 7%), meaning we would have to work more to add more money to it to get back to the 25x from the approx 20x we actually be at.
In theory there is enough safety margin that initial negative returns are okay with the 4%, but a poor start is also the easiest way to fail so I would understand the concern. If I get you 25x my COL in my investments I'll pull the plug for sure. If I am concerned about a big run up I'll just add a few easy layers of safety to get started on the right foot:
- minimize my non-essential spending for the first couple years [ie local camping holidays instead of a trip to Europe]
- setup an easy PT job that's fun for a small bit of extra $$
- use a more conservative asset allocation that can resist sequence of return risks [ie more bonds or a ladder of GICs for the first few years, etc..]
If the markets drop I'd be fine and still have my free time to enjoy. If markets chug along without a massive correction than after a few years I'll have a huge safety margin built in and I can relax get back to my luxury spending.
What I wouldn't do is work a few extra years FT just in case I needed to save the extra 25 - 17 = 8yrs worth of expenses. That just seems like a poor balance of risk vs. return given that we don't know what the market will do and it may not crash. It just might be flat for a decade to revert to mean returns.