Is 3% the New 4% for Retirement?

There's been much discussion about the rule of thumb that retirees can safely spend 4% of their initial assets each year during retirement, adjusted for inflation. That is, somebody who retires with a $500,000 nest egg can withdraw $20,000 in year one, $20,000 adjusted for year one's inflation rate in year two, and so forth. The 4% rule has been in force since the early 1990s, when a rocket engineer (and financial planner) named Bill Bengen published an article that popularized the notion. Recently, the rule has come under attack.