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Fixed real, guardrails, VPW, RMD, and the tradeoffs between them
The 4% rule is only one way to turn a portfolio into retirement income. Some retirees want the steadiest possible paycheck. Others are willing to cut or raise spending when markets move. Others deliberately spend more up front and accept that real income may drift lower later.
The right choice is not just about mathematical survival. It is about whether your household can tolerate spending cuts, how much valuation or portfolio noise you want in your paycheck, and how much ending wealth you care about leaving behind.
Interactive strategy ranker
Active priority
Prioritize stable spending
Weights spending stability highest while still considering durability and manageable complexity.
| Rank | Strategy | What to expect | Best fit |
|---|---|---|---|
| #1 | Fixed real | Very predictable spending, but sequence risk can be high when early retirement years are weak. | Households that want the easiest budget to understand and can start from a conservative withdrawal rate. |
| #2 | CAPE dynamic | Can materially improve resilience when valuations are high, but spending may vary from year to year. | Retirees who are comfortable letting spending react to market valuation, especially over long FIRE horizons. |
| #3 | Guyton-Klinger | Potentially stronger outcomes in stress periods, but requires discipline to follow cuts and raises consistently. | Households that want a ruleset for when to tighten up or loosen spending instead of recalculating from scratch every year. |
| #4 | VPW | Tends to spend more in stronger periods and less in weaker periods; income can swing materially. | Retirees who accept year-to-year variation and want a portfolio-linked rule that is designed to exhaust more of the portfolio over the full horizon. |
| #5 | Constant percentage | Simple and durable, but income volatility is high and can be hard to live with after bad markets. | People who care more about never mathematically hitting zero than about maintaining a stable lifestyle. |
| #6 | RMD-based | Naturally conservative early and higher later, but spending is still market-sensitive and not needs-based. | Retirees who like a clear age schedule and expect spending percentages to rise as life expectancy shortens. |
| #7 | Floor and ceiling | Smoother than most dynamic rules, but requires active guardrail settings and periodic review. | Households that want some portfolio responsiveness but also need a minimum and maximum real paycheck they can plan around. |
| #8 | Spending smile | Can support higher early spending, but relies on confidence that your household can spend less later. | Retirees who expect early retirement to be the expensive phase and are comfortable planning for slower real spending later. |
How this ranking is scored
Scores are preference-weighted, not universal advice. We combine historical success rate, spending volatility, year-one median spending, strategy adaptability, and rule simplicity. Clicking a strategy row updates the detailed breakdown panel below.
Interactive comparison
This keeps the starting balance at $1.4M, so the strategies are being compared from the same retirement-ready baseline.
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Selected strategy
Choose any row in the ranking table above to update this detailed breakdown.
Rule of thumb
Start near $54K/yr and keep purchasing power roughly level in real terms.
Good fit when
Households that want the easiest budget to understand and can start from a conservative withdrawal rate.
Main tradeoff
You get the smoothest paycheck, but the rule does not automatically respond when markets get expensive or portfolios get stressed.
How Calcifer implements it
Calcifer models this in real dollars, so the spending target stays level in purchasing-power terms throughout retirement.
Parameter lab
Controls
Outcome deltas
Success rate delta
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Year-one median delta
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Volatility delta
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Ending wealth delta
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Before / after
Research takeaways
Fixed 4% research is a baseline, not a universal answer
Bengen and Trinity-style studies are foundational, but they were built around historical cohorts and classic retirement horizons. FIRE timelines, valuation starting points, and household flexibility can justify looking beyond a single flat real rule.
Flexible rules buy resilience by asking you to react
Guardrails, CAPE-based rules, VPW, and constant-percentage methods can support higher spending or stronger durability, but only if you can live with the paycheck moving when the rule says it should.
Behavioral fit matters as much as backtest fit
A mathematically elegant rule can still fail in real life if your household cannot stomach a 10% cut, valuation-sensitive spending, or a planned decline in travel and discretionary spending later in retirement.
Sources
Bengen (1994) - SAFEMAX / 4% rule
Historical baseline for fixed real withdrawals and the original 4% framing.
Cooley, Hubbard, Walz (1998) - Trinity Study
Inflation-adjusted stock/bond withdrawal success tables across classic retirement horizons.
Early Retirement Now SWR series
Long-horizon FIRE research, CAPE-based rules, and supplemental cash-flow modeling.
Early Retirement Now Part 54 - Dynamic withdrawal rates based on CAPE
Practical CAPE-rule implementation, parameter intuition, and long-horizon tradeoffs.
Robert Shiller data library
Historical return, inflation, and CAPE data behind valuation-aware analysis.
Guyton & Klinger (2006) - Decision Rules and Maximum Initial Withdrawal Rates
Foundational guardrails paper covering capital-preservation and prosperity rules.
Klinger (2016) - Guardrails to Prevent Potential Retirement Portfolio Failure
Follow-on guardrails research focused on early warning signals and failure prevention.
Bogleheads - Variable percentage withdrawal
Community-maintained VPW methodology and table-based implementation notes.
IRS - Required minimum distribution worksheets
Official age-based divisor tables that inform RMD-style withdrawals.
Blanchett (2014) - Estimating the True Cost of Retirement
Empirical spending-decline research behind the retirement spending smile idea.
Morningstar (2025) - The State of Retirement Income
Current research on fixed versus flexible retirement spending approaches.
Retirement Researcher - Floor & ceiling retirement spending strategy
Summary of Bengen's floor-and-ceiling spending-band approach and its tradeoffs.
Calcifer supports all 8 strategies in the Spend workspace, but some are direct literature-backed rules and some are simpler planning heuristics chosen because they are transparent, auditable, and useful for side-by-side comparison.
The Learn hub already includes 8 strategy-specific references, and this article uses that same shared source set so the app and the educational content stay aligned.