There is a case to be made for sitting in cash for a year or two, waiting out the coming recession, housing crisis, inflation panic, and/or financial crisis, and being ready to jump into an opportunity to buy in at valuations which are consistent with a 5%+ WR. We are all still used to a TINA, "everything bubble" world of ultra-low interest rates and have not yet thought out the opportunities involved if we could buy S&P500 index funds at PE ratios less than 15, preferreds yielding 8%, or A-rated corporate debt yielding 7% in a couple of years. People used to retire on just treasuries and annuities, and those days may come again for those with enough remaining money.
The downsides of such an approach are the odds of not having the guts to buy in a much scarier future if you're not willing to buy now, and the difficulty of increasing one's portfolio for a long time from earnings alone. The other downside comes if a mild recession is already occurring, inflation readings tank this summer, the Fed's rate hiking campaign goes on pause, and stocks rally 15%.
