"If a retiree adopts a 4% rule, he will waste money by purchasing surpluses, will overpay for his spending distribution, and may be saddled with an inferior spending plan,' wrote Sharpe and colleagues Jason Scott, managing director of the Retiree Research Center at Financial Engines, and John Watson, a fellow at Financial Engines, Inc., of Palo Alto, Calif.and later:
What's really wrong with the 4% plan is its insistence on fixed spending coupled with investing in a portfolio with variable returns, says Sharpe. In the most obvious case, when a retiree's portfolio underperforms, stubbornly pulling money out at the same rate means he'll run out of money at some point. Clearly, most advisors would see that coming, and caution the retiree to spend less."
"If people are going to invest in risky assets after they retire, they will need to choose a strategy that adjusts their spending as the value of their savings changes. And that's quite a leap from the inflexible 4% rule."
Will try to update this one later.