Most retirement spending rules start with a number.
But retirement does not move in a straight line. Markets change, Social Security begins, a mortgage may get paid off, spending patterns shift, and your needs often look different at 75 than they did at 65.
In this video, I discuss the flaw in many “safe” retirement spending rules and why a starting withdrawal rate is not enough.
A good retirement income plan should help answer questions like:
• What can you spend today?
• What would cause that spending amount to change?
• If the market drops, do you actually need to cut back?
• If things go well, when is it okay to spend more?
• How do you know whether fear is driving the decision or the plan is?
The goal is not just to avoid running out of money.
It is also to avoid getting later into retirement and realizing you lived smaller than you needed to because your plan never gave you permission to spend more.
If you are approaching retirement, this video will help you think about why retirement spending needs to be managed over time, not decided once and left on autopilot.