Even if someone took a ridiculous $220K from the credit line during a huge crash at the very beginning of retirement (few here would), you act like the retiree wouldn't have a single penny extra to pay that off with?
You wrote, "I guess your portfolio is a little bigger, but your lifestyle took a decades long face punch."
You don't seem to understand just how much 'bigger' the portfolio would be. It's not 'little'.
You should be able to pull all you owe out of your investments when the market recovers (though this does depend on your own taxes). The 4% "rule" already expected that you've been pulling that money out all those six years.
Hold on. Read what I wrote. I assumed the OP would begin tapping the HELOC during a large market downturn, and start making
monthly withdrawals until the market recovered, which was five years in my example. That turns out to be $220,000 compounded (roughly speaking).
Can markets take that long from peak to recovery? You bet. Longer even. 2007-2013 and 1970-80 are two recent examples. You can see that my five year example might have been too generous, and you could easily wind up with a whopping HELOC balance by following this scheme.
Next, the OP said he would be following the 4% rule, a central assumption of that rule is the 4% means 4% of the initial balance (inflation adjusted). So that's what I thought his withdrawal rate would be. But you're saying that's not true at all, and your strategy actually entails making very large withdrawals after market recoveries. Borrowing money during market down periods and then making large lump sum withdrawals is a lot of things, but it ain't even in the zip code as the 4% rule. It is a radically different strategy. So, you need to cut us break for not realizing when you say "4% rule" you're not talking about the same 4% rule as the rest of us, you're talking about some other strategy that only you know about. Thanks for filling us in, but no need to get snippy just because we can't read your mind.
By the way, have you backtested this large, irregular withdrawal strategy? For some reason, I'm thinking you haven't.
Next, you said something about how this strategy works unless interest rates go to unseen levels. Do you mean unseen or unseen by you? For a lot of decades, mortgage interest rates were around 6-8%. It is pretty reasonable to assume they will be back there someday, maybe sooner than we think. And something else to keep in mind, interest rates tend to rise in times of economic or political turmoil, which is the time when markets tend to fall.
Remember the 1973-80 period I mentioned earlier? Mortgage interest rates started off normal 6-8%, but then shot up to 12% by the end of that period. And then they went a lot higher after that. That really wasn't very long ago. Maybe your scheme will work, maybe it won't. But I definitely wouldn't plan on it being there for you when you need it.