Withdrawal Strategies in Retirement

Decumulation is the hardest math problem in personal finance. In accumulation, your goal is simple: maximize savings and buy assets. In retirement, you must spend those assets while navigating a three-dimensional minefield of market volatility, inflation, and unpredictable lifespans. The models below trade off against each other on exactly one axis — how much spending variability you accept in exchange for a higher starting rate — and the right answer depends entirely on how much of your spending is genuinely discretionary.

One fact frames every strategy on the list: the safe rate is valuation-sensitive. It is not a constant of nature but a function of what you paid for your assets. Retire when markets are cheap and 4% is conservative; retire at the top of an expensive market — the moment most likely to tempt you, since that is when your portfolio looks largest — and the historically safe rate has been closer to 3–3.5%. Every static rule below inherits that dependence silently; the dynamic rules exist to respond to it.