Inflation gets figured into the withdrawal rates - you subtract the inflation rate from your nominal return to figure your real rate of return, and then the real rate is whatever passive income you have available to live on. I'm guessing that the 4% withdrawal figure is calculated by figuring a 7% average nominal return (seems to be a common historical number for balanced portfolios), subtracting 3% inflation, and the remainder is a 4% real return. So you can pull out 4% of your portfolio each year and have it maintain the same real value, after inflation.
A 7% average return would require more exposure to volatile assets (like equities) than is prudent for those investing for over a potentially short time like retirement. One must also consider morbidity risk, currency risk and interest rate risk.
I think it is most prudent for non-investing professionals who want to live this life to buy two annuities, one denominated in the currency of their home country and the other denominated in the currency of their new country.
