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Investing Blog Roundup: Evaluating Variable Spending Strategies

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When it comes to retirement spending, the most famous strategy is the “4% rule” in which you do not actually spend 4% of your portfolio balance per year, but rather spend 4% in the first year and then increase that dollar amount with inflation every year, regardless of portfolio performance.

And then there’s a multitude of variable spending strategies, in which you allow your spending to fluctuate in some way based on your portfolio’s performance.

Retirement researcher Wade Pfau recently wrote a two-part series about such variable spending strategies. In Part 1 he describes a framework for how to evaluate such strategies, and in Part 2 he takes a look at how a handful of the most popular such strategies measure up.

Other Recommended Reading

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