I suspect that there have been years in the past where the combination of lower bond yields and lower expected stock returns have existed, so that contingency should be included in the Trinity Study (I don't have the data, so can't check this on my own).Historically, a safe harbor withdrawal rate for a 65 year-old couple has only been about 4% of the portfolio's initial value [adjusted each year for inflation]. As we have discussed, given today's lower bond yields, lower expected stock returns, greater longevity, and greater need to save for medical expenses, that need may be too aggressive for many.
This would mean the main point Larry and Kevin are making here is that an SWR of 4% may be "too aggressive," because retirement may need to last more than 30 years (the book states that there is a 25% chance that one of a couple might live to 97) and expenses as one ages go up due to increasing medical expenses.
So, the issue with the Trinity Study isn't the 4% rate, but the fact that it only goes out 30 years and only applies general inflation to expenses, not some higher medical expense inflation rate.
There's some non-zero chance that I or my wife might live to be 120. There are real (life style) costs to limiting my withdrawals to some arbitrary percentage, say 3%, without some basis for doing so.
My question is how one might actually implement this information for planning purposes? How many years should I use for an endpoint? How to factor in higher medical expenses?