Here is roughly how retiring Jan 2020 with $1 million and $40,000 annual expenses would have faired.
2000 1,000,000
2001 873,750
2002 707,484
2003 510,791
2004 604,383
2005 582,520
2006 577,012
2007 600,996
2008 528,122
2009 299,846
2010 349,345
2011 360,066
2012 336,953
2013 345,478
2014 387,204
2015 399,786
2016 340,796
2017 362,681
2018 404,129
2019 389,189
2020 446,642
2021 479,167
This is scary stuff. I would have gone back in 2003 for sure, maybe 2002. This tells me, you can do all the statistical analysis you want but if you retire at a peak you are probably going back to work at some point unless you have balls of steel and are a little insane.
Not to mention if I did go back to work in 2003 adding $50,000 a year back to my stache, I would have to work for 11 more years in order to get back to $1 million and maybe feel comfortable retiring again. That's some heady sh*t for someone who has a pretty good job now and wouldn't be able to get as good of a job if they retired and had to re enter the workforce in a few years.
I think there are two sane responses to this data. Option 1: save up 20-30% more than what you NEED for FIRE so you can mitigate a large initial drop. Option 2: YOLO and retire at minimum FIRE stache and take a wait and see approach, knowing there's a decent chance you go back to work if the first few market years don't go well.
*ETA - I think the numbers are a little off because I shouldn't have used inflation adjusted returns. It should have been nominal returns with the expenses adjusted for inflation. But the point remains, if you retire at a peak and the next few years are down or even sideways most people would feel the need to go back to work imo.
Here are actual market returns (not inflation adjusted) with a fixed $40k spend. The numbers are definitely better, but are skewed a little too positively now.
2000 1,000,000
2001 907,860
2002 745,544
2003 555,496
2004 674,279
2005 675,140
2006 703,613
2007 757,862
2008 707,070
2009 415,141
2010 513,204
2011 557,308
2012 536,301
2013 583,321
2014 692,704
2015 746,074
2016 680,394
2017 784,045
2018 940,010
2019 855,378
2020 1,056,167
2021 1,204,851