How to choose a withdrawal strategy

The choice is really about who absorbs market risk: your portfolio or your spending. Everything else follows from that.

Killion implements five named rules and applies whichever you pick to both simulation and backtesting, so you can judge a policy on history as well as on simulated markets.

Step by step

  1. Work out how much of your spending can actually flex. Add up fixed costs. What is left is what a flexible rule can cut. If that number is small, a flexible rule will not behave the way the chart suggests.
  2. Set the essential spending floor. This is the level below which withdrawals will not be reduced regardless of what the rule says.
  3. Pick a rule and run it. Start with fixed real dollar as the baseline, then try guardrails. The difference in ruin rate is what the flexibility is buying you.
  4. Backtest the same rule. Run it against every real market since 1928. A rule that looks good in simulation and poor in history deserves scrutiny.

Common questions

Which rule should I start with?
Fixed real dollar, because it is the 4% rule everyone else quotes and gives you a baseline to compare against. Then test guardrails to see what flexibility is worth in your specific plan.
Can I set my own withdrawal rate?
Yes. The rate is configurable rather than pinned at 4%.
Back to the help centreContact us