Why 4% Could Fail
Concern about outliving one’s wealth is a major fear in the minds of Americans over 50 years old. Most retirees cannot re-enter the labor force under the same terms that they exited it, so their assets must constitute their lifetime income stream. And if they suffer poor returns early in their retirement, it means that their sustainable withdrawal rate will likely be sharply lower. Their standard of living will be more vulnerable to market volatility, and extra caution is warranted.
Pfau, Wade, "Why 4% Could Fail" (2015). Faculty Publications. 250.