Will that cover health insurance & expenses? That stuff gets pricey fast.
If I chose to live fully off investments in early retirement, my taxable income would be lower since than $40k since I would be spending some from after-tax accounts (which doesn't count as income). The lower income could mean higher subsidies, and lower health care costs.
I don’t see why you wouldn’t just keep working in a low stress easy job, part time or something, and continue to build savings.
Though I didn't specify the portfolio composition, most of my holding are US Large Cap, which are the 2nd best performing asset class below small cap: https://www.compoundvalue.com/wp-content/uploads/2013/10/IR_..., but both classes are significantly above the others (Bonds & T bills), so I'm not sure what's meant by low returns. If you mean sequence of returns risk, most people use a bond tent to mitigate the risk.
Like, if you've got $800k and can reliably earn 5%, as long as you're withdrawing only $40k you're good. But if you withdraw $41k one year, your principal is now only $799k. Next year if you need $42k, the return from your $799k is only $39,950, so your principal goes down to $796,950, etc.
From a quick spreadsheet, if inflation is 2% annually and you can get 5% on your principal, you deplete your $800k in ~32 years.
Doesn't seem too hard to fix with some supplemental income here and there?