The SWR is defined as the quantity of money that can be withdrawn from a portfolio over time, including inflation adjustments, without leading to a complete depletion (i.e. failure) of the portfolio during the investor’s lifetime.
Last week, Professor Kenneth French addressed the subject of the sustainable withdrawal rate in a video post on the Fama/French Forum website, and I’ve posted the video here:
Most SWR discussions are based on historical data or Monte Carlo simulations, which I think can be very valuable. However, Professor French’s approach of starting with the simplest case (long-term TIPS) and building from there helps to highlight that we are taking on real risk when we stretch for higher withdrawal rates.