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Making Sense Out of Variable Spending Strategies for Retirees
Keywords: 5 words maximum
retirement, income, variable, spending, rules
Very short description for use in the program to help attendees understand more than a title can describe
Variable spending strategies can be situated on a continuum between two extremes: spending a constant amount from the portfolio each year without regard for the remaining portfolio balance, and spending a fixed percentage of the remaining portfolio balance. Two basic categories for variable spending rules explored include decision rule methods and actuarial methods. Ten strategies will be compared using a consistent set of portfolio return and fee assumptions, and using an XYZ formula to calibrate initial spending: the client willingly accepts an X% probability that spending falls below a threshold of $Y (in inflation-adjusted terms) by year Z of retirement.