Many readers have read past articles where I mention the safe withdrawal rate or specific articles that talk about the 4% Rule or safe withdrawal rate (SWR for short). The articles would discuss whether the 4% Rule is still relevant or safe enough in this time and age. Before writing this article, I did not formally explain the safe withdrawal rate to my readers really, but I think it will do readers an injustice if I don’t help explain this once and for fall. There is just too much misunderstanding over the whole 4% Rule or safe withdrawal rate study, which has resulted in many articles leading retail investors to think in various ways. Before we criticize something or say something is good enough, we must understand how the safe withdrawal rate is derived. Then we can start critiquing its robustness. In this article, I will start from the very...