The financial advisor William Bengen who demonstrated the 4% rule in his October 1994 article in Journal of Financial Planning published a response to the Morningstar paper, he ironically notes that he has recently increased his estimate of a safe withdrawal rate to 4.7%. Looking into the data used for Morningstar’s projections, Bengen points out two key assumptions that drive the lower withdrawal rate:
First, the study assumes that asset returns will be much lower than they have been in the past (projecting a 5.23% return for a 50/50 portfolio, versus historical returns from 1926 to 2020 of 9.55%);
Second, that this low-return environment would persist for (at least) a 50-year time horizon.
As a result, while the Morningstar paper generated a lot of headlines for going against the conventional wisdom of the 4% rule, it did so using potentially unrealistic assumptions (since historically, no period of below-average returns has lasted anywhere near that length of time).
You can read Mr. Bengen's article here to get more details of his response.