I'm not an investment expert, that's just based off what I've read about index funds.
An index fund is basically a basket of different stocks, so you don't have to worry about making decisions about what to invest in. There are different index funds with different risk levels. For example, if you have a high risk tolerance you can invest in a tech index fund which is essentially a basket of high tech stocks, which is high risk high reward.
A relatively safe index fund on average over the past few decades returns about 10% a year, but this isn't guaranteed. There could be some years where it's less than that. Based on this variance, it's recommended you withdraw no more than 4-5% a year.
This 4-5% you're withdrawing means the size of your investment account is still growing (because the returns are 10% a year, and you're withdrawing less than 10%) so the 4-5% you're withdrawing this year is less than the 4-5% you're withdrawing 10 years from now.
