This 4% rule is based off the Trinity study, but you are making a common mistake in interpreting the results.
>...The 4% refers to the portion of the portfolio withdrawn during the first year; it is assumed that the portion withdrawn in subsequent years will increase with the consumer price index (CPI) to keep pace with the cost of living. The withdrawals may exceed the income earned by the portfolio, and the total value of the portfolio may well shrink during periods when the stock market performs poorly. It is assumed that the portfolio needs to last thirty years.
The important part is that there is absolutely no guarantee that "you can withdraw 4% forever." They found that in the different time periods they studied that taking 4% would mean the portfolio would last 30 years before being exhausted. That might be fine if the person works to 65, but might not work out very well if they retire much earlier. (The paper also allowed for increasing the amount taken due to inflation, so if you can survive on the 4% the portfolio should last longer.)
>...The 4% refers to the portion of the portfolio withdrawn during the first year; it is assumed that the portion withdrawn in subsequent years will increase with the consumer price index (CPI) to keep pace with the cost of living. The withdrawals may exceed the income earned by the portfolio, and the total value of the portfolio may well shrink during periods when the stock market performs poorly. It is assumed that the portfolio needs to last thirty years.
The important part is that there is absolutely no guarantee that "you can withdraw 4% forever." They found that in the different time periods they studied that taking 4% would mean the portfolio would last 30 years before being exhausted. That might be fine if the person works to 65, but might not work out very well if they retire much earlier. (The paper also allowed for increasing the amount taken due to inflation, so if you can survive on the 4% the portfolio should last longer.)
https://en.wikipedia.org/wiki/Trinity_study