The key points of the trinity study are that saving 20-30 times your annual expenses should result in your stash lasting 30 years.
Actually that's just people's interpretation of the study conclusions. Even though it seems like an appropriate corollary, the study never actually mentions anything about multiplying by the desired annual amount before inflation adjustments by the reciprocal of the withdrawal rate. Why don't we have a look at the actual conclusions ending the study:
• Early retirees who anticipate long payout periods should plan on lower withdrawal rates.
• The presence of bonds in the portfolio increases the success rate for low to mid-level withdrawal rates. However, the presence of common stocks provides upside
potential and holds the promise of higher sustainable withdrawal rates. In other words, the addition of bonds helps increase certainty but at the expense of potentially
higher consumption. Most retirees would likely benefit from allocating at least 50% to common stocks.
• Retirees who demand CPI-adjusted withdrawals during their retirement years must accept a substantially reduced
withdrawal rate from the initial portfolio. For retirees with significant fixed costs and for those who
tend to spend less as they age, CPI-adjustments will likely cause a suboptimal exchange of present consumption
for future consumption.
• For stock-dominated portfolios, withdrawal rates of 3% and 4% represent exceedingly conservative behavior. At
these rates, retirees who wish to bequeath large estates to their heirs will likely be successful. Ironically, even
those retirees who adopt higher withdrawal rates and who have little or no desire to leave large estates may
end up doing so if they act reasonably prudent in protecting themselves from prematurely exhausting their
portfolio. Table 4 shows large expected terminal values of portfolios under numerous reasonably prudent scenarios
that include withdrawal rates greater than 4%.
• For short payout periods (15 years or less), withdrawal rates of 8% or 9% from stock-dominated portfolios appear
to be sustainable. Since the life expectancy of most retirees exceeds 15 years, however, these withdrawal
rates represent aggressive behavior in most cases. By definition, you have a 50% chance of living beyond your
actuarially determined life expectancy, so it is wise to be conservative and add a few years.
A multiplier of 20 would correspond to a withdrawal rate of 5% and under the inflation-adjustment scenario there are a lot of instances where that fails.