The links below point to some of the research that inspired and influenced the Flexible Retirement Planner. The planner doesn’t directly implement any of the decision rules or other algorithms described in the listed papers and web sites, but the writings have provided ample food for thought as the planner has evolved over the years.
 | New Research on How Much Clients can Spend in Retirement Pfau, 2013 |
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This article was published in November 2013 on the Advisor Perspectives website. It surveys and evaluates so-called variable retirement withdrawal strategies. With these approaches, retirees adjust annual withdrawal amounts during retirement based on the performance of their investment portfolio. |
| Decision Rules and Maximum Initial Withdrawal Rates - Guyton, 2006 |
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This paper is from the March 2006 issue of the FPA’s Journal of Financial Planning. It’s relatively easy reading and it lays out the basis of so called “decision-rule” based retirement withdrawal strategies along with providing simulation results that are neatly organized. |
 | Will the True Monte Carlo Number Please Stand Up - Milevsky, 2006 |
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This paper is a critique or analysis of several of the Monte Carlo retirement simulators that are out there (sorry—Flexible Retirement Planner wasn’t out yet). The main thrust of the work is that there’s a wide degree of variation in the output that’s mostly a result of variation in the assumptions that the tools have made, but that’s also unexplained. The paper points out some shortcomings of the “art” and suggest that some standardization might help. |
| Dynamic Retirement Withdrawal Planning - Stout, 2006 |
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Another paper on dynamic retirement withdrawals using a decision rule based approach. This paper suggests that mortality risk should also be modeled as part of the Monte Carlo Simulation process. Also, there’s some discussion of applying a floor and a ceiling to the dynamic withdrawal rates. |
| Decision Rules and Portfolio Management for Retirees: Is the Safe Initial Withdrawal Rate Too Safe? - Guyton, 2004 |
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This is an earlier article by Jonathan Guyton on withdrawal decision rules that also appeared in the FPA’s Journal of Financial Planning. |
| Conserving Client Portfolios During Retirement - Part IV, Bengen, 2001 |
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This paper builds on previously identified retiree spending “phases” and leverages these to explore alternative withdrawal strategies. The paper explores several strategies that attempt to boost retiree living standards while minimizing the effect on the likelihood of ruin. |
| Can You Trust Monte Carlo Models - Seeking Alpha - Geoff Considine, 2006 |
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This is a small piece from a contributor to the Seeking Alpha site that critiques the paper by Milevsky above and also has some debate in the comments on how to model portfolio returns in long term Monte Carlo simulations. |
| What is the Safe Withdrawal Rate in Retirement - Retire Early Homepage |
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This article is a bit dated but provides a quick summary and links for several retirement withdrawal studies including Bengen, Harvard, and Trinity. |