Faculty Publications


How Much Can Clients Spend in Retirement? A Test of the Two Most Prominent Approaches

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In my last article, I described research-based innovations for variable withdrawal strategies from retirement portfolios. In this article, I put Jonathan Guyton’s decision rules and David Blanchett’s simplified withdrawal formula to the test. I simulate the income and remaining wealth generated with these two strategies using different underlying Monte Carlo assumptions. These results provide planners with a better understanding about the potential spending paths generated by these different approaches, and they also suggest where further improvements can be made with regard to designing variable retirement withdrawal strategies.