Just curious, if CAPE is actually high, what do you plan on doing with your money? Put it somewhere other than the stock market?
No, but it would impact my decision to carry mortgage / loans in order to invest, and the amount I have in bonds / cash. If the break-even interest rate on debt is 2% or if it is 5% makes a big difference.
It may also be useful in determining SWR, or your lifestyle after FIRE. The 4% rule might still be used but need additional backup plans or more flexibility.
The most common response here to the high valuations is that, if you were to FIRE, TODAY, you might want to consider a 3.5% SWR. This, of course, could change in 3-6 months if we were to get a 15-25% pull back. In which case at THAT POINT IN TIME, the 4% rule might seem a little more honest.
In reality though, once you reach 25X your expenses, (the 4% rule) you are set. Not because the math on remaining 100% fixed with withdrawals will necessarily work out or not, but because the FIREie is young enough that he/she can weather changes and remain flexible.
Someone in their 70s has no option of returning to work, growing a side business, or really doing much at all. Compared to someone who is 42, with reasonably fresh job skills or time to learn them.