For what it's worth, growth after accounting for after-inflation reinvested dividend returns is what matters. Not just SP500 value, but the combined return of dividends as well. SP500 dividend yield is around historic lows but still is about 2%. The lowest it ever has been in
100+ years is only 1% and that was for a very short period of time.
If inflation is 0% then the market growth does not need to be as high as it would if inflation is 3% or 6% to sustain ER. Especially when combined with dividend reinvestment, it should be obvious to factor into these decisions, but I find it is often overlooked. Sure it is nice to have sustained combined return rates of 6-7% after inflation, but you do not
need them to succeed at FIRE. This is really important to consider.
A 0% inflation results with 1% real market growth (after dividend reinvestment, meaning the actual market value would be slightly negative or completely flat) for 30 years straight would make the 4% rule still work, because you would be withdrawing 3% of your portfolio every year and never have to increase the amount as 100/3 = 33 years. Even with 0% growth after dividend reinvestment (so the index value goes down every year exactly what the dividend percentage is) you still get 25 years. Reality of course won't be quite so simple, but it is important to recognize this sort of thing when attempting to find reasons FIRE plans will fail.
Essentially the overall market having a lower growth rate for a sustained period does not necessarily directly cause ER to fail. Depending on the relative ratios, it might make it work better or worse. There are a lot of competing factors which stabilize things for FIRE folks.
For example, you
probably will not have to worry about a high inflation, low return environment being sustained for years. Many of the drivers for higher inflation correlate to stronger economic performance. Which should correlate to better market performance, however imperfectly. So a higher inflation environment is less likely to happen over an extended period of time with minimal market growth (or negative real growth). And note that the periods of time affecting FIRE considerations are long - quite a few years will not 'destroy' plans. A few decades? That
might.
In my opinion, the worst thing to happen for someone in FIRE is for a long period of flat real reinvested growth (well over 10 years)
followed by a multi-year crash and an inflationary period where the market doesn't keep up (like the 70s). And again, flat total growth initially, not flat index value. An early crash you can react to quite easily and adjust your course if needed, so I don't consider this so bad of a situation (such as if you retired exactly in 2000).
Frankly though, given the last 100 years and the strong performance of the market given a lot more world events such as world wars and the cold war and it's associated "should we go to nuclear war" dancing, I am fairly confident the next 100 will be less eventful.
An interesting observation, since Jan 1, 2000 (the height of the .com bubble) the CAGR of the SP500 has still been about 1.87% after inflation. A starting balance of $1,000,000 at that time, with a 75/25 mix of stocks/bonds using cFIRESIM, would
still be worth about $600k today with a 4% withdrawal rate, and that is a FIRE date immediately prior to a multi-year crash. A 100% stock mix still would be worth about $500k.
I will close with an interesting thought exercise. How many folks here would FIRE on a 4% SWR if you
knew the market would experience consistent 2% after inflation growth (including dividend reinvestment) every year for the next 50 years? And why?