Seeking specificity around Flexible spending policy

[ochotona]

I forgot a line... is this OK?

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Portfolio grew last year (real), Portfolio grew since inception (real), Budget for next year

YES, YES >= 2, Get 2 x COLA

YES, YES < 2, Get 1.25 x COLA

YES, NO, Get 1x COLA

NO, YES, Get 1x COLA

NO, NO, No COLA

[jimr]

Yes. That looks right.

[ochotona]

Thanks. So here is a strange thing, not a question, but an observation... Flexible and Conservative aren't much different from each other for my inputs. But Stable is very different, lower Probability of Success for the same Annual Retirement Spending, as expected. This is very useful.

I find the FRP (Conservative or Flexible) with 95% Prob Success results exactly match the Fidelity Retirement Analysis tool for "Significantly Below Average" market conditions and a Fidelity Retirement Score of 111.

Your mileage may vary!

[jimr]

That makes sense.

Flexible and conservative are almost the same except for what happens when things are going well in terms of portfolio growth. So it makes sense that they'd have similar prob of success. In terms of outputs, often with flexible, especially with very robust plans, you'll see a somewhat higher ending median withdrawal amount and a somewhat lower ending median portfolio value compared to conservative. This can vary a lot though, depending on what else is going on with the plan.

OTOH, stable is basically no spending policy, except fund what's asked for until the portfolio is depleted.