On the “4% safe withdrawal rate” rule of thumb. Crafted as a comment a year ago on a blog article by a Belgian/Spanish FI enthusiast. He sized his portfolio in the first draft of his financial plan using this rule-of-thumb. For ease of conversation, he denoted his post-FI expense level target “E”.
The 4% rule-of-thumb comes from US historical 30-year horizon that the Trinity study looked at. Others have explored longer horizons in the US, and Wade Pfau looked at developed nations in a 2010 study, available at http://www3.grips.ac.jp/~pinc/data/10-12.pdf
Pfau 2010 results suggest your “safe withdrawal rate” in Barcelona is 2.56%, set by the 30-year experience starting 1957. 4% for you would fail to last thirty years for 36% of Spanish 30-year sequences of returns. Nest-egg required would be 469*E. Ouch! (Belgian is worse, at 1.46%, 40% fails, and 822*E — double ouch!)
These are for portfolios where the principal is fair game. I presume you want to live off income alone? If so, your “My Portfolio” link gives 3.36% dividend yield, or 358*E, probably with much lower failure probabilities. Much better!
For comparison [when I wrote this response at the end of 2015], I’m in the US, using in-state muni bonds at 4.51% yield, or 266*E. The bond stash continues to build slowly at 124*E.