Interest rates go up and down. The Trinity Study is meant to give an indication of a safe withdrawal rate for a wide variety of circumstances. War. Famine. Disease. Depression. Commodity Shocks. Currency Crisis. My own gut feeling is that low interest rates and (maybe) slightly pricey stocks doesn't quite rise to the level of the aforementioned disasters, but then everybody has to find their own comfort level.
It is a bit of an exaggeration to say that it survived all of those things -
- Disease, not really as there was no major (as in caused economic calamity) - there was spanish flu in 1918 but that pre-dated the trinity study.
- famine, one time during the great depression (so if they happened at the same time was the root of problem - the depression or the famine)
- War, actually never because all of the wars for the trinity study were fought on foreign soil which is actually economically beneficial.
- Commodities, energy crisis in 70's - ok but may have contributed to the failure years of the 60's
- currency crisis, major one was Russia in 1998 so for the 4% trinity still falls under TBD but my guess is that it will be ok given the last 20 years.
However, what is maddening is the claim that the 4% is optimistic. It's a statement grounded in zero reality. The Trinity Study is an excellent study grounded in facts. If you want to dismiss it and do your own analysis, that's fine! Pfau did that here, still got 4%. What's really silly, though, are those that are doing the equivalent of reading a study on bicycle safety and helmet usage and drawing the conclusion, "Hmm, this study says wearing a bicycle helmet reduces fatalities. I'm going to be smarter than that and wear two bicycle helmets."
It is not the same as trying to wear two helmets for safety, it is more like having good reason to believe, but not know for sure, that you are taking the bike from the pavement to a rugged trail so you decide to wear a better helmet and maybe some other safety gear.
Also, I suppose you meant to link to Pfau article, but didn't so here:
1.7% SWR for a 60/40 portfolio based on high values/low rates - so who knows - he suggests that the higher fees translate to 50-60bps so it would be a 2.2-2.3% for those of us with vanguard.
Pfau 2015 White PaperConcluded that under current conditions 4% SWR would be 69% chance of success vs. 94% - would likely be a bit higher with reduction of the fees.
Pfau July 2016 Article