I do like the 4% though mate.
each year the nest egg will go down by 4%. Therefore as you said,I will have 25 years to eat up my nest egg which means it'll be running out on the 90th birthday.
It may, but not necessarily. "The 4% rule", the one created by William Bengen in 1994, works like this. Let's say you retire with 100k (because 100 is a nice, round number). 4% of your balance at retirement (so $4000) is now set in stone. At this point, the "4%" concept has ended, as the math is only done once. From here on, that $4k is increased by the rate of inflation, and no longer references your actual balance. I'll arbitrary choose 3% for inflation.
Year 1 (of retirement): $100k (in shares) - $4k = $96k left
Year 2: $96k - $4120 ($4k with 3% inflation) = $91880. So far so good.
Year 2.9: Oops, the stock market crashes and drops by 50%
Year 3: $45940 - $4243.6 ($4120 with inflation) = $41696.4
Year 3.1: Obviously the share market is dangerous. Let's put the remaining balance into cash.
So after just three years, my portfolio is at 41.7% of it's original balance. And since I'm taking out a fixed, ever increasing amount each year of my now cash balance, I have left (without doing the actual math) let's say 9 more years of funds left. So we lost everything in 13 years.
(By contrast, my 5% rule rises and falls based on the balance each year, so the math in the above scenario would be quite different.)
This deliberately engineered example is really just to show that the 4% rule may not last 25 years, because it works on 4% of the original balance + inflation, not 4% of the current balance.
Now, if you were all in cash, 4% again doesn't last 25 years, since the withdrawal amount increases with inflation. 4% in a cash like instrument that grows in line inflation, does give you 25 years though. Phew!
The good news is that the Bengen 4% rule, which was based on you having 60% in stocks and 40% bonds, should last 30 years (with only a small chance of failure). I also read that Bengen, in 2006, revised his rule to 4.5% if tax-free, and 4.1% if taxed.
With that interlude aside, I return to your discussion about your upcoming death...
Chances are, would've moved onto another life by then if you believe in re-incarnation otherwise Salute to this world. Sorry to sound gloomy, but I like to evaluate my worst case scenario.
Let's predict your death. Such fun! I'm not sure how old you are, but in Australia, the average life expectancy for a middle aged male is 80.4 years (as at 2016). Now that "average" includes people who die early. As you age, your life expectancy goes up! I know, it's magic. If you live to 65, you're LE is now 84.6. If you live to 85, your LE becomes 88.9 years.
Medicine is increasing our longevity, so it's possible our life expectancy will continue to rise even further within our lifetime.
If you retired at 67, I'm thinking 30 years LE is probably a fairly safe estimate. The safest thing though, is to have a plan which allows your assets to grow considerably over time, which I believe is about to be your next point.
On a more optimistic scenario the returns (capital + dividends) will outpace the 4% draw-down on most years and that means the nest egg will actually grow in tiny increments, which means all the luxuries like pay rises in the 'Golden Years'
+1 for golden years and pay rises!