I saw this blog post today and found it interesting. This particular blogger has a PhD in Economics from Princeton, so he knows a little bit about wherof he speaks.

http://wpfau.blogspot.com/2011/08/retirement-withdrawal-rate...

What do those pretty rainbow lines mean? Well, it may be safe to withdraw as much as 5% of your nest egg per year if you have a conservative stock allocation. That is great news for people like me, who expect to have a modest nest egg. (Especially since I sunk a lot of my capital into a house which promptly lost half of its value. But I whined about that yesterday, so I don't want to whine about it two days in a row.)

He ran monte carlo simulations for single men and same age couples, but I wish he had run them for single women too. And he used mortality rate tables, not a ballpark guess as to how long your retirement might last.

I have never seen this idea laid out quite this way. A 5% withdrawal rate is only slightly more risky than a 4% withdrawal rate! Yay. Still, I doubt I will start with more than 4%. If I am lucky enough to have good returns the first 2 or 3 years of retirement, I may seriously consider a bump up to 4.5% or 5%.

I can't help but notice that his simulation showed a 100% stock portfolio with a 8% annual withdrawal rate (the very scenario recommended by the very popular Dave Ramsey) has a 40% failure rate for men, 50% failure rate for couples. Failure being defined as completely exhausting your nest egg while you are still alive. This is precisely why I view his investment advice as so terrible. Being flat broke in my 80s is just not my goal. I wish he (Dave Ramsey) would just stick to what he is great at (motivating people to get out of debt and get their finances on track) and not give subpar investing advice.

Edit: I had originally written that DR recommends a 10% withdrawal rate. That was incorrect, he recommends an 8% withdrawal rate.