Start here
The basics
With the simulator off, every retired year spends what its cards prescribe. With it on, one selected rule produces a spending scale for each covered retirement year. That scale can trim or raise the cards the household says are flexible, while protected cards remain fully funded in the plan.
Illustrative numbers
Protecting essentials while trimming a flexible card
Retired spending as written$60,000 essentials + $20,000 travel
Cards the rule may bendTravel only
Rule’s bounded scale this year90%
Essentials remain $60,000 and travel becomes $18,000, for $78,000 of modeled spending before the rest of that year is settled. The changed cash need can alter withdrawals, tax, balances, and later rule decisions.
Calculation transparency
How it works in MoneyWhatIf
- 01
The simulator offers five distinct rules: Guyton-Klinger guardrails, a fixed portfolio percentage, variable percentage withdrawal, Clyatt’s 95% smoothing rule, and a raise-only spending ratchet. Each rule has a dedicated guide with its own arithmetic and limits.
- 02
A rule runs only in retired years and can be narrowed to a chosen plan window. It can cover every enabled household spending card or only the cards selected as flexible; unselected cards and a child’s compiled spending remain at their written amounts.
- 03
Every rule’s result is clamped between the household’s chosen floor and ceiling, expressed as shares of the cards’ as-written amounts. Those bounds limit the rule’s adjustment; they do not guarantee the plan can fund the bounded spending.
- 04
The annual engine applies the resulting scale where spending is created, before funding is settled. Taxes, cash buffers, withdrawals, Medicare effects, property sales, shortfalls, and later balances therefore respond to it.
- 05
Plan Resilience uses the same saved spending rule in every sampled market path, so its reported outcomes include the modeled household response rather than silently reverting to fixed spending.
Keep in mind
Model limits
A rule is a behavioral scenario, not a prediction that a household will make every prescribed cut or take every permitted raise.
The model adjusts spending once per plan year. It does not represent monthly budgeting, a midyear decision, or which purchases inside a card change.
A floor protects the selected cards from deeper rule-driven cuts, but it is not an affordability guarantee; the funded plan can still require withdrawals, a permitted sale, or report a shortfall.
The defaults and rule choices are educational modeling inputs, not a recommendation for a particular household.
This explanation documents the planning model. It is educational, not individualized tax, legal, Medicare, or investment advice.
Where it appears
Where to use it
See this concept in context, with a guide to each page and its controls.
The words behind it
Related financial terms
Plain-English definitions, with 2026 figures and worked examples, from the financial terms glossary.