Does The 4% Rule Work In Today's Markets?
This is a matter where Monte Carlo simulations are able to shine, by allowing simulations to begin from today’s starting point rather than incorporating historical outcomes generated from completely different market environments.
Let’s consider outcomes for sustainable spending rates using the Monte Carlo simulations with the low-interest-rate world of today as a starting point for the simulations.
Pfau, Wade D. PhD, "Does The 4% Rule Work In Today's Markets?" (2016). Faculty Publications. 529.