Hi Chin,

You and I were posting at the same time above. What you are calling the flexible rate, Bernstein calls the fixed percentage rate. From your link:

 What happens if instead we withdraw a fixed percentage (as opposed to a fixed amount) of our principal? In other words, if we start with a nest egg of $1,000,000, and withdraw 7% each year, we will begin withdrawing at a rate of $70,000 per year. If our principal then falls 50%, we are left with only $465,000, so we can now only withdraw payments at a rate of .07 x $465,000 = $32,550 per year. This approach has the advantage that we never run out of money, although the stipend amount will fall dramatically in some years.

I don't use it. I started with the 4% initial WD and increased by inflation—at lease in most years. With this method your withdrawals are more predictable. And if you begin in any market that provides some gains, your actual WD percentage begins to decrease. After 4 or 5 years, you build up a cushion and instead of withdrawing 4% you will be withdrawing closer to 3%, even with the inflation adjustments..  

Here is a link to another study that looks at things a little differently, although pretty much comes to the same conclusion as other studies—there is no substitute for using some common sense when withdrawing money in bad markets.

http://online.wsj.com/article/SB121259350492445223.html?mod=hpp_us_inside_today 

Paul