You can conservatively spend 3% of a lump sum each year and the earnings will keep up with inflation. So if you had $1m in savings, you could spend $30k/year in today's dollars forever (and still have $1m at the end).
If you want to spend down the principal, the calculation becomes more complex and you need to use software rather than a rule of thumb.
Sorry but I've become a bit of a personal finance nerd recently. :) Here is the story on withdrawal rates:
The 4% number comes from a study that discovered that a portfolio with a constant 4% rate would survive any period in US stock market history -- even the Great Depression. But past performance doesn't guarantee the future performance. Try to do this with European markets and there are periods where a nest egg won't survive a 0% withdrawal rate. But yeah 4% is the guess people use when planning retirement.
Thats fine, but in real life you have to be flexible as you approach retirement and keep an eye on the math. The first 10 years of retirement are the critical ones. After that you hopefully built up a buffer and don't have to worry due to the nature of compound interest.
I described 3% as conservative. Over most long periods 4% and even 5% would be fine, but you only have one life and you don't want to fall into an unfortunate period.
If you want to spend down the principal, the calculation becomes more complex and you need to use software rather than a rule of thumb.