Glad to hear that you're finding the planner useful.I have been experimenting with the TPAW Planner for awhile now, and it seems like a very useful and informative tool. Many thanks to Ben and Jacob for their hard work on this project.
One thing I can't quite figure out is how I would implement the tool's recommendations on a month-to-month or year-to-year basis. (I'm a little embarrassed to admit this because it is probably obvious.) That is, if we were to retire tomorrow, and we needed to start living off our savings, how would we use the planner to determine our monthly and/or annual spend?
Would I make sure that my portfolio balance was correct and then withdraw the monthly amount in the 50th percentile (or multiply that by 12 for the year)?
Or is the tool not designed for that sort of fine-grained decision-making? Maybe it is more of a long-term trend planner? Or maybe there is some documentation that I have overlooked?
It absolutely can be used that way during retirement. Check out the Tasks panel to the right of the graph. It suggests what to do each month (withdrawal amount, asset allocation).
Yes, before retirement, the "Tasks" card on the right side of the results panel will say how much to contribute each month. After retirement, it will say how much to withdraw each month. Future withdrawals are uncertain and so will have a range, but the uncertainty resolves when you get to any given month. So Tasks will always say exactly how much to withdraw each month. You won't see a range there.If you're on the main screen to the right of the "monthly spending during retirement graph" there's a box labelled "tasks" if you click on it a screen will show up telling you how much you can spend, where it will come from, and what you're allocation should be.
I think its up to you if you check it monthly, update your balance and make a withdrawal; or do so quarterly. I suspect that most would use it more as a way of staying on track rather than letting it dictate your exact expenses but I guess it could be used either way.
As dorster said, take the withdrawal number given in Tasks as a guide. Some months you may have to spend more than this amount, other months less. If your withdrawals are typically coming in around that number or lower, you're doing fine. If instead you find yourself consistently withdrawing more, you need to either find a way to reduce spending, or create a new plan that you can follow.
Statistics: Posted by Ben Mathew — Sun Jul 21, 2024 12:24 am