This link gets into more of what I am saying above.....I do like toward the end when it is basically dumbed down to use common sense.
http://financialmentor.com/retirement-planning/how-much-money-do-i-need-to-retire/safe-withdrawal-rate/13192
I agree the article was dumbed down. I could have reduced that whole article to one sentence: If you think the future will be worse than the past, use a lower withdrawal rate. Boom! Done. Just saved you from reading 12,000 words.
Yes, of course, one should understand the basic assumptions behind the 4% rule. But just because there are assumptions, it doesn't follow they are bad assumptions. Note that the main criticism seemed to be that Pfau concluded that the future might be worse than the past. Hold the presses! That assumption is presented front and center in every discussion of the SWR. And by the way, if you remove the high fees Pfau assumes, the SWR becomes 4% again. Hmm.
One other thing. The article refers to Rob Bennett several times. Do you know who Rob "Hocus" Bennett is? He is very possibly, in fact almost certainly, insane. He claims to have invented a SWR calculator based on stock valuations (referenced in your article). There is no such calculator, at least not the way he claimed. He claims he co-authored an academic paper with Wade Pfau, and in fact Pfau's work is based on his ideas. Uh, not true either. Bennett's pattern of harassment got him banned from every FIRE board I'm aware of. Morning Star, Bogleheads, Motley Fool, etc. You name it, he's been banned.
Here is some of his advice regarding withdrawal rates, right during the peak of the housing bubble:
Instead of ignoring your home equity or depending on housing wealth to carry retirement, maybe it's best to take an approach in the middle, said Bennett, of PassionSaving.com. Because he retired early, Bennett withdraws no more than 4 percent of the value of his investments. But if he needs more money, "I allow myself to take up to 2 percent of my [home] equity."
Bennett keeps a running tab on his home's value. He considers this a conservative strategy, because he will only spend 2 percent of equity if his home value keeps climbing more than 2 percent. Moreover, equity represents less than half of his assets. And, he said, he might ultimately sell his house and realize some cash gain.
http://articles.baltimoresun.com/2005-10-02/business/0509300140_1_retirement-experts-retirement-income-retirement-fundSounds like a good, conservative strategy to you? Sounds in-fucking-sane to me. Your retirement strategy is to sell your house AFTER you spend the equity? What do you do then, live in a box? There is no possible way the guy could be more full of shit. I mean c'mon, that's just stupid advice. And then you have an article that quotes him as an expert....uh, kind of makes me wonder about the guy who wrote the article.