Someone else asked me about the 4% vs 5% thing.

Honestly, I haven’t figured it out yet.

I thought my numbers were wrong at first but nope, the numbers were right.

Therefore, I blame my brain. I have no idea what algorithm they used to reach these conclusions (you can try by reading their study here, if you figure it out please let me know).

However, I do imagine it has something to do with this part:

*“Calculations of monthly portfolio returns implicitly assume rebalancing of portfolios each month to the desired allocation of stocks and bonds.”*

Maybe somewhere in the rebalancing, they changed their final results for the short-term? I’m not sure.

As for your second question, the 3% thing didn’t mean you couldn’t withdraw 3% unless you invested more money.

It meant that if you wanted to withdraw $x per year, you’d have to work backwards and know how much you’d need to invest.

So if your goal is to withdraw $40,000 per year, you’d need to have $1,000,000 for a 4% withdrawal.

If instead you wanted $40,000 per year at a 3% withdrawal (which is safer, albeit TOO safe), you’re need $1,333,333.

That’s all.