Apparently most people aren’t using using an arithmetic-based plan. Even those with loads of resources are still stressed that they’ll run out of money. There really isn’t much utility in depriving yourself to get more than a 95% success rate. At that point, the odds that you’ll run out of money, are less than the odds that you’ll die in a nuclear war, the next pandemic, or a climate disaster – eventualities for which there are no financial planning solutions.
The other thing that people miss is that a 30-year sequence of returns that tests the lower limits of the 4% rule can happen at anytime. And you’ll probably be several years into it before you realize it’s happening. Thus, the people who believe that that can safely take 5, 6, or 7% are fooling themselves.
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