"4% Rule" is not really much of a rule. I wouldn't even call it a guideline.
It is really just an historical observation. Over fifty-five 30-year periods starting from 1926 to 1981, the Maximum Withdrawal Rate (MWR) for a 75/25 portfolio was never less than 4%.
This is kind of like the 4-minute mile. At one time, the theory among sports experts was that no human could run a mile in under 4 minutes. This theory held up until Roger Bannister broke the 4-minute mile in 1954. So much for that idea.
from http://en.wikipedia.org/wiki/Mile_run_w ... rogression
The current record is 3:43:13 set by Hicham El Guerrouj from Morroco in 1999.
So nobody knows if this 4% observation will hold for every period. In fact, some researchers that looked into that question concluded that it probably will NOT hold.
One paper shows that the MWR has likely dipped below 4% in the mid 1990s when valuations starting going through the roof.
This paper was discussed in this Bogelhead thread viewtopic.php?t=64905&highlight=mwr
Even today, it appears likely that MWR will be lower than 4% because the combination of earnings yields, dividend yields and bond interest rates are all lower than they were during the period of the 4% observation.
4% Rule, 4-minute mile, 61 home runs in a season, you can't expect records to stand forever. Records are made to be broken.