There is sequence of return risk. The average return by itself can hide that risk. Imagine if the day you retire you experience a series of bad crashes, followe

There is sequence of return risk. The average return by itself can hide that risk. Imagine if the day you retire you experience a series of bad crashes, followed by years of stagnant growth, and finally the last couple decades of your life of massive growth. In that case, the average will tell you one thing, but in reality you’ll be destitute because you’ll have to consume your capital during those early years while it is depressed. A Monte Carlo simulation is the best practical estimation for looking at that. I believe that historically a ~3% withdrawal rate was the highest you could go, for retirement periods of 50 years or longer with substantial equity investments.