Happy Friday Reader!
How Much Can You Safely Spend in Retirement?
(Hint: It Could Be More Than You Think.)
It’s one of the most important — and most misunderstood — questions retirees face:
“How much can I actually spend each year... without running out of money?”
Most people know the 4% Rule — the old rule of thumb that says you can safely withdraw 4% of your portfolio in year one of retirement, then increase it each year for inflation.
It’s simple, historically reliable, and backed by decades of data showing roughly a 90% success rate over 30 years.
But it’s also rigid.
Your withdrawals don’t change when the market does — which can be emotionally tough when your portfolio dips.
So let’s look at two more modern, dynamic approaches that allow retirees to spend confidently and adjust intelligently.
The Guardrail Strategy
This approach starts with a similar withdrawal rate (usually around 4.5%–5.5%, depending on your age and longevity), but instead of sticking to one static rule, you make small adjustments based on performance:
📈 When markets rise, you capture growth for income increases.
🛡️ When markets fall, you temporarily tighten spending to protect your plan.
It’s flexible, practical, and reflects how retirees actually live — spending a little more when times are good and being cautious when needed.
Fixed Income + Guardrails: The Safety-First Advantage
This is where the magic happens — and it’s the foundation of most income plans I build.
By combining guaranteed income sources (like CDs, bond ladders, or annuities) with a growth portfolio, you create a plan that’s both stable and adaptable.
The fixed income portion provides guaranteed cash flow that’s independent of the market — covering your essential expenses no matter what happens.
And because your “needs” are covered by guarantees, your market-based portfolio only has to support your “wants” — giving you flexibility to ride out volatility without cutting back your lifestyle.
This structure can often boost your safe spending capacity by 15–30% — not by taking more risk, but by reducing uncertainty.
You get:
🧱 Stability from guaranteed income.
🌱 Growth from your portfolio.
💵 Higher lifetime income with greater peace of mind.
In short, the key to spending more safely in retirement isn’t guessing the right percentage — it’s building a plan that blends safety, flexibility, and growth.
🎥 Watch this week’s video:
I walk through all three philosophies — including real-life examples of how combining guaranteed income with guardrails can meaningfully increase your spending power.
👉 Watch it here