Guyton-Klinger guardrails calculator

Start from a withdrawal rate, raise it with inflation except after a down year, and cut or raise spending by a set amount when the current rate breaches a guardrail.

The calculator

First-year spending$40,0004.0% of the starting portfolio
Spending after the run$52,8193 cuts, 0 raises
Ending portfolio$1,102,604After 30 years
Guardrail events33 capital-preservation cuts

Starting at $40,000, a constant 5.0% return with 2.0% inflation produces 3 cuts and 0 raises over 30 years, and ends at $1,102,604.

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The four rules

The public form of Guyton–Klinger (2006) is four decision rules, not a formula. Year-one spending is the initial rate times the portfolio. Each later year, spending rises with inflation unless the portfolio fell — that is the inflation rule. If the current withdrawal rate then sits above the upper rail (initial rate × (1 + band)), spending is cut by the adjustment. If it sits below the lower rail, spending is raised. See guardrails.

Assumptions

One return every year, no fees, no taxes, and the published inflation rule. A constant return will understate how often the rails actually trip — the sequence of returns calculator shows why the order matters. Killion models the same policy against 1,000 market paths.

Frequently asked questions

What is the Guyton-Klinger rule?
A withdrawal policy that starts at a fixed rate, raises spending with inflation except after a down year, cuts about 10% if the current withdrawal rate breaches an upper guardrail, and raises about 10% if it falls through a lower one.
What guardrail width should I use?
The 2006 paper uses a 20% band around the initial rate — 4.8% and 3.2% if you start at 4% — and 10% spending adjustments. Narrower bands adjust more often; wider bands leave more of the risk on the portfolio.
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