How dynamic is your retirement spending strategy?

Jannie Delucca


Karin Risi: There’s a lot of sophisticated modeling behind our dynamic spending strategy, but the concept is really simple. What it allows our retirees to do during the drawdown phase is to spend a little more when markets are up and to pull back spending in down markets. We hear client feedback, Tim, and they really like this particular strategy, because it takes the guesswork out of asset drawdown for them. It can be a really daunting experience to save for decades and then in retirement, try to figure out—in a tumultuous market—how much you can take out of your portfolio. Dynamic spending helps our clients do that.

Tim Buckley: All right, so in that spending, you’ll tell me, “Tim, spend less.” But I’m going to guess that right now people are spending less already. 

Karin: Exactly. The portfolio strategy and discussions with your advisor can help fine-tune that spending and figure out how much you need to pull back. Not every client knows. It’s not a standard rule of thumb. You might want to know—depending on your current wealth level—how much do I need to pull back, and some of that’s going to depend on the duration of this downturn.


Next Post

Staying the course really matters

Transcript Karin Risi: When you have steep losses like this, clients—some of them—are questioning whether they should go to cash. Tim Buckley: Bad idea. Karin: It’s a bad idea. We know this, right? So what we also know is that time and time again, no matter what the root cause […]