Sustainable spending for years of retirement
β / month
β/yr in today's dollars Β· first retirement year pays β/mo (future $)
The Journey
How your savings build, coast, and fund retirementStress Test
How resilient is this spending against market uncertainty?1. What if average returns are permanently higher or lower?
Shifts both growth rates by Β±2%/yr for the entire plan (inflation unchanged). Tests whether your return assumption itself is too optimistic.
2. Monte Carlo β what if returns arrive in a bad sequence?
Keeps your average return, but randomizes year-to-year swings across 1,000 simulated market paths using your volatility (Ο).
Distribution of the monthly spending each simulated path could sustain β bars left of the headline line are paths where it runs short.
3. Down-year rule (simple guardrail)
Enable βCut spending after a down yearβ in Your plan: in the 12 months after a year with a negative market return, spending drops by your chosen cut, then restores after an up year. Same 1,000 simulated paths as above.
Not Guyton-Klinger proper: GK triggers on the withdrawal rate drifting Β±20% from its starting rate and cuts/raises 10% β a third variant this app does not model (research by Pfau and Jeske finds its cuts often overshoot). This rule keys off market returns instead, and its cut never stacks.
4. Risk-based guardrails (re-solved annually)
Enable βRisk-based guardrailsβ in Your plan: each retirement anniversary, sustainable spending is re-solved from the pot you actually have over the years left, on the same 1,000 paths. Raises go fully to the re-solved level; cuts close only part of the gap each year.
Not Guyton-Klinger proper either (see block 3): this keys off plan health β pot and years left β not a withdrawal-rate band. It is an annual re-solve targeting the success-target spend, not Income Lab's monthly whole-plan risk recalculation (no mortality, taxes, or lumpy cash flows here), and it assumes you actually review and adjust every year. Note there is no βstarting spend at the success targetβ here: with yearly resets, year-1 spending barely binds, so that number would be meaningless β average and lowest spending are the honest measures.
The deterministic headline is calibrated to be the median Monte Carlo path (~50% success with no cushion). Don't stack both pessimisms: the β2%/yr scenario is already the middle path under permanently worse returns, whereas the Monte Carlo target protects against bad sequence-of-returns timing around your baseline.