How Much Can Clients Spend in Retirement? A Test of the Two Most Prominent Approaches
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.
Pfau, Wade, "How Much Can Clients Spend in Retirement? A Test of the Two Most Prominent Approaches" (2013). Faculty Publications. 141.