How to read this number

The 4 % rule is an excellent compass and a terrible dogma. It comes from a market that delivers the average, but real life deals the good and bad years in any order. A lower rate (3–3.5 %) buys peace of mind against sequence-of-returns risk, which is why the book also recommends a cash reserve, a gradual shift towards protection, and flexibility in spending. The target capital is a destination, not a promise: revisit it alongside dynamic withdrawal strategies.