Why do early retirees often use a withdrawal rate below 4%?

The 4% rule was calibrated for a 30-year retirement. Someone retiring at 40 might need their money to last 50 or 55 years, and a portfolio has more chances to hit a bad stretch over a longer horizon, so the sustainable rate falls. Research suggests moving from a 30-year to a 50-year horizon can drop the safe rate by roughly half a percentage point or more.

Lower expected future returns and decades of compounding fees add further caution. As a result, many long-horizon FIRE planners anchor to 3.25% to 3.5%, which raises the target multiple from 25x to roughly 28x-31x expenses. It is a meaningful trade: a lower rate means working longer or spending less, in exchange for a much higher probability of never running out.