My results, which are not accurate as yours came up pretty close after 22 years.
The ending size of your portfolio is $876K nominal, $543K real. The size of the portfolio resulting from Bengen's scheme is $1.366M nominal, $847K real. These two portfolios are not close in value.
You designed a scheme radically different from Bengen's. Bengen assumed that one would withdraw a constant amount of money each year, in real dollars. Your scheme withdraws an amount each year that fluctuates based on the value of the portfolio.
From the way you describe your design, 4.5% + 2% for inflation, it seems that you still think that Bengen's scheme is to withdraw 4.5% of the value at the end of each year after adjusting for inflation. This is the miscommunication.
Bengen wrote (same quote as before): "After the first year, the withdrawal rate is no longer used for computing the amount withdrawn; that will be computed instead from last year's withdrawal, plus an inflation factor." In contrast, each year you use a withdrawal rate (7%) to compute the amount withdrawn.
You direct PV to withdraw 7% of the portfolio each year, leaving 93% to grow (or shrink) over the following year. So the withdrawals can never exhaust the portfolio. However, as the portfolio shrinks in size, so will the size of the withdrawal.
----------
For example, suppose that the portfolio is invested in something that loses 10% of its value, no more, no less, each year. Then under your scheme, a portfolio that started with $1M would progress as follows:
Start: $1,000,000.
Year 1 end: $900,000.
Withdraw $63,000 (7%).
Year 1 after withdrawal: $837,000.
Year 2 end: $753,300.
WIthdraw $52,731 (7%) - notice that the size of the withdrawal is shrinking.
Year 2 after withdrawal: $700,569.
...
Year 22 end: $21,452.46
Year 22 withdrawal $1,501.67
Year22 after withdrawal: $19,950.79
I find it instructive to do calculations by hand, but in case you don't believe me, here's PV's calculation. If you mouse over the graph to year 22, you'll see that the value is $19,951 (before adjusting for inflation).
----------------------
Bengen's scheme (assume 0 inflation for simplicity, higher inflation would merely make the results worse):
Start: $1,000,000
Year 1 end: $900,000
Withdraw: $45,000
Year 1 after withdrawal: $855,000
Year 2 end: $759,500.
Withdraw $45,000 - or more if there is inflation
Year 2 after withdrawal: $724,500.
...
Year 11 end: $50,025.36
Withdraw $45,000
Year 11 after withdrawal: $5,025.36
Year 12 end: $4,522.83
Not enough to withdraw $45,000. Portfolio is exhausted.
Again, I think that the figures above are more instructive than blindly using a calculator. But here's PV's calculation. Mouse over year 11, and you'll find the value $5,025 (before adjusting for inflation). Obviously PV reports that the portfolio is exhausted in year 12.

Discussing same option with my wife. Our mortgage is at 2.625%. I still think there are opportunities to beat that rate through equity returns on longterm basis....

What he said. I cannot imagine, even today, paying off any mortgage under <4%, which you should be able to outdo over time.
It really all has to do with the hard but slightly flexible reality of monthly cashflow and the softer but serious variable of sleep-at-night, does it not? Unless you watch Orman all day. Plus time, as LB notes, and by implication debt as a percentage of total.
I have two mortgages, one a heloc actually, both under $100k, both cheap, and am tempted every so often to reduce further, till I ask myself why? The conventional mortgage is so small no one is willing to redo it cheaper, so far as I can determine.

@FD1000, your article's chart sure looks a lot like cart linked below.
FSRPX vs VFINX shown here since 1999:
Consumer Discretionary Sector has significantly outperformed the S&P 500

>> You're writing about, to use @davidrmoran's term, what you "feel". I'm writing about numbers.
That is Bengen's word, only about inflation. (From your above quote from his nice article [p3], entire thing starting here:
https://www.fa-mag.com/news/choosing-the-highest--safe--withdrawal-rate-at-retirement-57731.html?section=308&page=1)
I was wondering only whether his conclusion from the 2008 article might be different in such a high-CAPE era, whether he would so conjecture even though as you note he does not do conjecture.

I think there is a breakdown in communication.
I didn't know 2 things:
1) that PV has Inflation adjusted box under the chart.
2) When you select Withdrawal fix Amount then another window open and you can select Inflation adjusted
So instead, I selected a fix Withdrawal Percentage of 4.5% + added an estimate 2.5% for inflation. There is no need to adjust again for inflation.
My results, which are not accurate as yours came up pretty close after 22 years.

There is no “right” answer on that one - unless you’re confident you can predict the future.
It’s true some parts of your (or my) diversified portfolio aren’t earning anywhere near 3% today, I choose to look only at the portfolio as a whole. That includes everything: the good, the bad and the ugly portions. That portfolio (100% either tax deferred or exempt) is viewed in my eyes as one singular entity with individual parts working together. Based on the past 25 years in which I’ve kept reliable records it has produced more than 3% annually (averaged out) by a good margin. (Keep in mind that the overall return includes the cash and bond positions.) That’s not braggadocio. Hell, most of the people who visit this board could lay claim to an average return greater than 3% over recent decades.
Now - if one has both the discipline and the psychological make-up to run a portfolio in which his paid off mortgage is included as a “cash” holding (which you’ve converted it to by paying it off), than it’s probably a good decision. The difficulty is one’s more visible “paper” assets (funds, stocks, etc.) will have to be more aggressively invested than that individual may be accustomed to since the portion of the portfolio formerly invested in cash or lower risk bonds is now being occupied by that paid-off mortgage. I’d have a hard time adjusting to that. In addition, I feel I can do a better job of diversifying investments across the asset spectrum with a somewhat larger investable sum. So, while my mortgage (a refi used for adding living space) could easily be paid off with invested money, I’ve chosen to let it run for the time being.
Some other considerations - Currently you control that sum of money that’s owing on the mortgage and invested elsewhere. Once you tender that sum to the mortgage lender they take control of that money. You’ve surrendered control. You’ve also surrendered liquidity. Some of this question relates to how actively and enthusiastically you invest. If you enjoy the game and are very actively engaged, you might like having some “opportunity money” on hand to grab up bargains when they arise - even if carrying that low yielding cash is costing you a couple extra percent a year.
Here’s two respectable truisms that are diametrically opposed, yet both are IMHO accurate and fit your situation.
1) You can’t go wrong by paying off debt. (true)
2) It’s always better to keep your options open. (true)
Mind you, both of the above are true. Yet, the first statement would favor paying off the mortgage while the second would support hanging on to that cash. :)

Back in 2010 when faced with a similar dilemma, CDs coming due and a dearth of good fixed income options I decided to pay off my mortgage. At that time my fixed rate mortgage was 5 3/8%. Refinancing might've gotten me to around 4 1/4% with around $2000 in costs at that time. Instead I used the CD proceeds, my MMF balance and some misc other investments to pay off the mortgage. Saving 5 3/8% with zero additional cost was a good deal I figure.
Now the other side of the coin. Had I taken all that money and invested it in the stock market in 2010, I would be way ahead by comparison. But I was wary of taking too much risk at that time and was already heavily invested in equities. So, peace of mind was my goal and I simply look at that move as a portion of my FI portfolio. Plus, no one can forecast the future. And I suspect that the stock market will not do as well in the next 10 years as it did in the last 10 years. But, that is pure speculation. I think trading a guaranteed 3% savings for money that is earning almost nothing is not a bad idea. Provided you are unwilling to take risk with those funds.
Good luck with your decision.

@BenWP Funny you mention that. Discussing same option with my wife. Our mortgage is at 2.625%. I still think there are opportunities to beat that rate through equity returns on long term basis. I recently added 2 new funds: Fidelty emerging asia and CHIQ which is a China etf fund focused on the domestic consumer...

Both are close...Mine=$876K...yours=$847K.
I ONLY CARE about numbers adjusted for inflation.

If you ONLY CARE about numbers for inflation, you might stop saying that your number is $876K. Adjusted for inflation, it is $543K, which amounts to a 2.64%/year loss in real value over 22.81 years.
Try this: Run a portfolio of pure cash (CASHX), no withdrawals. I've even set it up for you. I hope you'll agree that cash lost value to inflation over the past 22 years. Prove it. What's the inflation adjusted ending value of a $1M starting portfolio? How did you adjust for inflation, and did you do the same thing with your $876K amount?
Alternatively, you could just take your $876K and divide by 1.60, which is roughly the cumulative inflation between 1998 and now. That comes out to $548K. (The difference between this and $543K is likely due to the fact that 1.6 represents inflation until 2020. Add another 1% inflation for the first three quarters of the year and you're down to around $543K. Though the figures are close enough I really don't care about the cause of the 1% discrepancy.)

We don't know what will be in the next 30 years but I like to make predictions NOW since we are talking about retirement now.
My assumptions of 2.5% and why I used 7% are close to yours of 4.5% withdrawal and then using adjusted for inflation. Both are close...Mine=$876K...yours=$847K.
I ONLY CARE about numbers adjusted for inflation.
Basically in the last 22 years this portfolio lost a purchasing power at about 0.5% annually.
In the next 30 years, I think it will get even worse. There is a good chance to lose at least 1.5-2% annually after inflation. I used Savings Withdrawal Calculator, starting with 1million, taking out $15K annually for 30 years left me with $550K.
Still OK according to Bengen.

@msf, I added VWINX to your link...interesting performance:
Inflation Adjusted (Final Balance) VFINX / FBNDX is $846,764 and VWINX is $1,098,373.
Comparing Withdrawals & Performance - VWINX to a 50/50 allocation

You can see that my assumptions end results are pretty close to yours.
Remaining portfolio:...Mine=$876K...yours=$847K.
I wrote: "At the end of the 22+ years, it [Bengen's model, not mine] shows a remaining portfolio value of $1.366M, or $847K in inflation adjusted dollars (check the inflation-adjusted box at the bottom of the graph).
Your scheme: $543K in inflation adjusted dollars (check the inflation adjusted box at the bottom of the graph).
From this point it may get much harder not easier. FBNDX(bonds) past performance since 1998 was 5% annually, it's going to be about 2% lower. This means that the same portfolio could make about 2% lower than the above and further erosion
All talk, no numbers. Here's a start.
Take 50% US Stocks, 50% US Bonds. Start with a nominal value of $1.366M, i.e. Bengen's value as of now. Use your 3% nominal return figure for bonds. Use your 7% nominal return figure ("now it's lower 7 - 2 = only 5%") for stocks.
As a starting withdrawal, take Bengen's 4.5% figure ($45K on $1M), adjusted upward for inflation over the past 22 years (about 60%, as I've already shown), i.e. start with a withdrawal amount of $7200. Follow Bengen's scheme, not yours - adjust that withdrawal amount for inflation annually (based on historical inflation, which is likely too high, but that just makes this model more conservative).
Run a simulation based on these parameters for 10 years - a higher bar than the 8+years needed to complete the 30 year span. The survival rate is 1000/1000.
I'm done. You're writing about, to use @davidrmoran's term, what you "feel". I'm writing about numbers.

My TDA guy suggested I leave a foothold in my TD account to keep it active in order to have easy access to my records, statements, tax forms, etc. So I'm doing just that by leaving a few dog stocks DRIPing into themselves --- but otherwise I've been moving the rest of my TDA to Schwab in large chunks every week or so.

For current TD Ameritrade clients, in case you hadn't heard yet, Schwab and TDA are allowing current TDA clients to transfer their accounts early to Schwab without incurring the account closing fees of $75 per account at TDA. We have begun the transfer process ahead of the mass forced transfers coming down the road.

Interest (I) = Principal (P) x Rate (R) x Time (T)
I think that's a formula that everyone can agree is correct whether it is applied to a 0.01% checking account, a variable rate savings account, a fixed rate CD, an inflation-adjusted Series I savings bond, or any other interest bearing vehicle.
It says that if R increases by 1%, then the interest you get in a year will increase by 1%. No exceptions.
It doesn't matter what the Fed does. If the Fed raises interest rates by 25 basis points but your bank doesn't increase 'R', then you won't be getting any more interest. If you think otherwise, well, you're just looking at the wrong 'R'.
Same with bond prices. Sure, the formula for bond prices is a little more complicated, but it's just as arithmetically sound as I = PRT.

Same with the formula for duration, which is essentially just the first derivative (rate of change, or "speed") of price as market interest rates (YTM) change.
As with I = PRT, if you believe the formula doesn't always "work" because the price of your corporate bond may not change when the Fed changes its overnight rates or when the 10 year Treasury rate drops, well you're just looking at the wrong 'R' (YTM).
Case in point. Between mid 2007 and September 2008, the market rate on 10 year Treasuries dropped from 5+% to around 3¾% while the rate on Aaa 10 year corporates barely moved. The formula worked fine; corporate bond prices didn't move because corporate interest rates didn't move. It's an oversimplification to talk about "rates" as though there's only one set of interest rates.

You can see that my assumptions end results are pretty close to yours.
Remaining portfolio:...Mine=$876K...yours=$847K.
From this point it may get much harder not easier. FBNDX(bonds) past performance since 1998 was 5% annually, it's going to be about 2% lower. This means that the same portfolio could make about 2% lower than the above and further erosion.
My portfolio like many others must be able to pay for LTC too.
I know, that's beyond the scope, but in my case I don't want my portfolio to lose purchasing power and the ability to handle unexpected health issues and why Bengen (and other) papers are just a starting point for me.

For current TD Ameritrade clients, in case you hadn't heard yet, Schwab and TDA are allowing current TDA clients to transfer their accounts early to Schwab without incurring the account closing fees of $75 per account at TDA. We have begun the transfer process ahead of the mass forced transfers coming down the road.

The idea in using historical data is to use historical data. One doesn't input one's own hypotheticals. In particular, one uses actual inflation rates (which PV supports).
Also, the idea is to reproduce Bengen's scheme, not introduce one of your own design. Bengen starts with a fixed amount (4.5% of the initial pot), and adjust that dollar amount annually by the actual rate of inflation. What you did instead was withdraw 7% of the portfolio value at the end of each year.
From Bengen's original paper:

The withdrawal dollar amount for the first year (calculated as the withdrawal percentage times the starting value of the portfolio) will be adjusted up or down for inflation every succeeding year. After the first year, the withdrawal rate is no longer used for computing the amount withdrawn; that will be computed instead from last year's withdrawal, plus an inflation factor.

https://www.retailinvestor.org/pdf/Bengen1.pdf
Here's Bengen's model in PV applied to the time frame you selected.
At the end of the 22+ years, it shows a remaining portfolio value of $1.366M, or $847K in inflation adjusted dollars (check the inflation-adjusted box at the bottom of the graph). It's hard to see this investor's portfolio going down to zero in the next seven years, given that it's only dropped 15% in real value over the first 22 years.
FWIW, the annualized inflation rate for the years 1998-2019 (based on the NYU/Stern figures I previously cited) is 2.16%, and the current year's inflation rate is even lower.

Don't want to get off on a tangent, but a quick side opinion....if a professional ChFA with 30 years of experience managing millions with a large staff of assistants and networks of peers with unlimited resources cannot beat the SP500 over long periods of time, why do individuals with limited resources believe they can? The greatest advantage an investor has is to have a budget to asset ratio that allows him to not be forced to compete against the SPY benchmark. Survival is the top priority IMHO. Some of these professional PM's are even benchmarked by sector.

I like simplicity. We never had CAPE > 30 and interest rates so low which isn't a good start from here.
For my portfolio sustainability I always add inflation. The last time CAPE was over 30 was in 01/1998. I'm trying to be fair and not start at much higher CAPE such as 01/2000.
PV(link) shows that 4.5%(withdrawal)+ 2.5%(inflation) = 7% withdrawal in PV isn't good enough. I know, it's not 30 years but almost 23 years is still a good one.
It's worse now because bonds future returns will be worse in the next 30 years.

It's the usual academic argument. One considers volatility not really because it is "risk" but because with leveraging (or deleveraging, i.e. underweighting) one can achieve virtually identical results using any investment having a given "risk adjusted" rate of return.
I've previously quoted John Rekenthaler on this subject:

[A]lthough academic theory states that performance should be risk-adjusted, investors tend to pay greater attention to unadjusted returns--not without reason. Academic theory assumes the use of leverage, but few mutual fund owners will ever borrow to purchase more shares. They therefore may be pardoned for favoring the bottom line...

https://www.morningstar.com/articles/945008/be-thankful-that-you-dont-compete-against-vanguard
My question for investors remains: if you're not thinking about leveraging, why do you care about the volatility of an investment you won't touch for a decade or more? Why does it matter to you the path it follows to the same end result?
Jeff Ptak's take: "The saying is true: You really can't eat risk-adjusted returns. But it appears that higher risk-adjusted performers are easier for investors to use."
https://www.morningstar.com/articles/873910/you-cant-eat-risk-adjusted-returns-but-they-still-might-nourish
Buffett's take: "Charlie and I would much rather earn a lumpy 15% over time than a smooth 12%. (After all, our earnings swing wildly on a daily and weekly basis - why should we demand that smoothness accompany each orbit that the earth makes of the sun?)".
https://www.berkshirehathaway.com/letters/1996.html