Guardrails
A withdrawal method that spends a little less after bad years and a little more after good ones, within set limits.
Flexible spending lets you start with a somewhat higher withdrawal rate while keeping the risk of running out low.
Tools that use it
Related terms
- Safe withdrawal rateThe share of your savings you can spend in the first year of retirement, then adjust for inflation, without running out.
- Sequence-of-returns riskThe risk that bad market years early in retirement do lasting damage, because you sell investments at low prices to live.
- Spend-down planSpending your savings on purpose over a chosen horizon instead of living only on returns.
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Investing
Sequence risk: why the first ten years of retirement decide
Two retirees, the same average return and very different outcomes. How the order of returns can break a plan and what early retirees can do about it.