Everybody defends the 4% rule all the time so blindly, I know its because we all have a vested interested in it being right otherwise we would have to keep working. I do it to....well maybe I hedge with the 3% rule. But the reality is that it may not be right in a dramatic way to the good or bad, maybe its 10% SWR or a minus 10% SWR. We should question it, if for no other reason to have a better understanding or a thought process of how to react. Some of my thoughts on why to question (some have been discussed before):
1. The data is US centric from a period of explosive growth and innovation - this may or may not continue, but if you look at other more mature economies a 4% SWR would not have faired well. Some of this has been attributed to economic/social policies that crippled economies or stunted innovation and some of it is population trends (aging/shrinking) - both of which in play in the US right now.
2. There is no reasonable similarity between the markets in the early 1900's, mid-1900's, and now. The technology, democratization and leveraging (debt) of the markets today almost renders any prior data almost pointless.
3. The last 50-100 years or so that the trinity study relies upon is a mere blip on the timeline of human existence, so who knows what will change. It's funny though that when people discuss climate change, it too results in very strong opinions with data that is based on an infinitesimal time as relates to global climate....so small in fact that a single grain of sand on a beach would represent a more meaningful time.
4. I could think of more, but I lost interest...
Some parting positives....
1. So many innovations that can occur to drive growth....come on, the next great thing is the one that has been thought of yet or developed to a point of being marketable and profitable (although not sure that matters as much - Amazon anyone). There could be game changers out there - How about:
- artificial intelligence
- colonization of other planets to sustain population growth
- creation of an artificial planet (death star anyone?)
- Gurpolskomunz......you don't know what is now, but you will in 10 years.
2. The economy implodes, so what we are humans.....so very resilient, big deal we have to go back to farming, hunting, making our own food/clothes, bartering, fixing our own shit.....oh wait most of here are trying to FIRE so we can do all of this stuff.....oh wait we already are!
3. Fuck it, I only need my money to last 30, 40, 50 years......this is fucking infinitesimal amount of time in the grand scheme of things and all the time you have left and you are worried about the 4% rule.....get a life before you don't have one.