Subject: Re: Dividends
"In point of fact, the historical initial withdrawal rate that would have worked for a 60/40 portfolio over any particular 30-year time horizon has varied between 4% and 10%, and the median is close to 6.5%.
But since we don’t necessarily know up front whether the next 30 years will be more like the average, the highs, or the lows, the idea of the safe withdrawal rate was simply to treat every time period as though it might turn out to be the worst."
https://www.kitces.com/blog/th......

Success Rates by Withdrawal Rate:
https://www.whitecoatinvestor.......

Calculator:
https://www.firecalc.com/

These are excellent examples of the sort of "common wisdom" that is floating around the internet and should be dismissed out of hand, if not banned. It is up there with using bleach to sterilize your veins.

Not nearly enough people will read and internalize the health warning at the calculator site:
"If your retirement strategy would have withstood the worst ravages of inflation, the Great Depression, and every other financial calamity the US has seen since 1871, then it is likely to withstand whatever might happen between now and the day you no longer have any need for your retirement funds."
The reason I highlight this assumption is that it is NOT a reasonable assumption.
I predict that a large fraction of the people picking the resulting SWRs are in fact pretty likely to watch themselves go broke. And I say that after studying the data far more closely than the majority of the population.

First, the future can easily be far, far worse than anything seen in the past. Why would anyone believe otherwise? The future hasn't happened yet.
Second, scale that up by the risk added by the starting valuation levels these days: expensive equities and low real bond yields. US equities have been this expensive only about 5% of the time since 1916, and that's based on recent earnings that are hugely above trend.
Third, bear in mind that the observed returns in a given period in the past included the boost from a trend of becoming expensive, amounting to 0.87%/year of the historical equity returns on average. That trend is likely to end, and could easily reverse to become a drag.

Random spot check on equity risks: imagine portfolio of 100% the S&P 500 and its cap-weight predecessors. Purchased today at today's valuation based on cyclically adjusted real earnings (which is much less overvalued than if we use cyclically adjusted sales).
Imagine it drops the first period to the valuation level seen at the end of 1929 measured the same way based on cyclically adjusted earnings yield, then tracks real total returns observed starting then. (reality could easily be much worse, but this is something we know happened in the past)
Use the traditional 4% SWR. (4% of initial portfolio value withdrawn per year, adjusting with inflation)
That equity pot would last less than 11 years.

Just a thought.

Jim