The Based on Spending needs is the most frequently used strategy we offer. With this selection, the Planner will only withdraw enough to fund any shortfall between the expenses you’ve entered in your plan and new income coming in from sources such as work, pensions and Social Security. If you face a shortfall, the Planner will begin to withdraw from your accounts based on the withdrawal order, including any withdrawals required to meet the IRS RMD requirements. We refer to this as a “funded gap,” because you are meeting the shortfall from your assets and not incurring debt.

When you apply this strategy, the Planner depletes your accounts down to zero by your longevity age, exclusive of any legacy goal you’ve entered in your plan. This strategy provides a measure of how much you can spend on an annual basis without putting your plan at risk beyond the expenses you’ve accounted for in your plan. This is a great place to go for insights about your ability to increase lifestyle spending on wants and wishes.

When you apply this strategy, you set your desired withdrawal rate and start age. The plan will draw down your assets based upon the portfolio balance in the year selected by your desired percent. The drawdown will include an annual increase by the rate of inflation you’ve modeled. The strategy is applied in accordance with the well known 4% rule of thumb. Looking at the green plot line under this strategy allows you to estimate the approximate percentage of your assets your expense modeling entails.