It seems like the 4% rule has been around for decades, but according to this Wall Street Journal article
, it was first publicized in 1994 by Bill Bengen, a financial planner in Southern California. In the WSJ article, he discusses the risks that exist today and the composition of a portfolio that's representative of his 60-year-old clients.
However, he says the next five years could be crucial, particularly for individuals who retired in 2000 and have experienced two major stock-market downturns since then. He expects stock returns to be low for a while; if that is coupled with high inflation rates, "then retirees have a big problem," he says.