Cover the essentials first
Floor · what must be covered
Cover the essentials first
Match essential spending with guaranteed income. The portfolio is then responsible for the remaining gap, which the Spend module sizes.
Retirement spending by phase
Divide each phase into essentials (housing, food, healthcare) and discretionary spending (travel, hobbies). Only discretionary spending is expected to adjust in adverse markets.
Early retirement (higher activity)
Essentials a year.
Discretionary a year.
Total $80,000/yr
Late retirement (lower activity)
Essentials a year.
Discretionary a year.
Total $68,000/yr
Guaranteed income sources
Social Security, pensions, and rental income are independent of market performance. For Social Security amounts, use the estimate at ssa.gov. Later claiming increases the benefit.
Guaranteed income covers 0% of essentials
$0/yr income at 70 vs $56,000/yr essentials. The portfolio must cover the remainder. That amount is sized in the Spend module.
Timing adjustments
Early-phase spending: $80,000/yr (today's dollars).
Floor mapped. Next: select a withdrawal method for the remaining gap.
Size the portfolio withdrawals →