Spending plan rules at a glance

Side-by-side comparison of CPI, VPW, Guyton-Klinger, CAPE, and more.

TL;DR. A spending-plan rule decides what your base annual spending is in any given year of the simulation. The seven rules trade off lifestyle stability against portfolio responsiveness: stable rules keep your standard of living smooth but can sprint into a depleted portfolio in bad sequences; responsive rules absorb market shocks by cutting spending, which fattens the failure tail at the cost of more year-to-year variation.

Rule comparison

Rule	One-line behavior	When it shines	When it bites
Non-Inflation Adjusted	Same nominal dollar amount every year.	Short horizons; conservative back-of-envelope.	Long horizons. Inflation silently halves your real lifestyle.
Inflation Adjusted (CPI)	Initial spending grown by cumulative CPI each year.	The classic "4% rule" baseline; predictable real lifestyle.	No feedback from the portfolio. Keeps spending through bad sequences.
Percent of Portfolio	A fixed percentage of the current balance, every year.	Cannot run out by construction; tracks real returns closely.	Lifestyle is volatile. A 30% market drop is a 30% pay cut.
Variable (Z-Value)	Blends inflation-adjusted spending with a portfolio-ratio nudge.	Mild responsiveness without large lifestyle swings.	Tuning `z` takes thought; defaults are a starting point.
VPW	Amortized withdrawal: spread current balance over remaining years at an assumed return.	Mathematically targets a chosen ending value; principled.	Spending grows late in life as denominator shrinks; needs a floor for comfort.
CAPE	Spending rate keys off Shiller's CAPE-derived earnings yield.	Spend more when stocks are cheap, less when they are expensive.	Sensitive to assumed CAPE values; behaviour leans on long-term mean reversion.
Guyton-Klinger	Inflation adjust each year, then cut by 10% if your withdrawal rate has spiked, or raise by 10% if it has fallen.	Strong failure-tail protection while staying mostly inflation-stable.	The "guardrail" cuts can hurt in early-retirement sequence-of-returns risk.

Spending Floor and Spending Ceiling

The optional Spending Floor and Spending Ceiling are guardrails that clamp whatever the spending rule produces in a given year. They are entered in today's dollars; each year the engine multiplies them by cumulative inflation before applying them, so a $60,000 floor keeps the same real purchasing power across the whole simulation.

The mechanic is simple. Every rule above computes a candidate spending value for the year, and then the engine clamps it:

If the candidate is below the floor (after inflation), use the floor.
If the candidate is above the ceiling (after inflation), use the ceiling.
Otherwise, use the candidate as-is.

Clamping happens on every plan, including CPI and Non-Inflation Adjusted, but it only matters when the rule produces values that drift off the starting amount. That mostly happens with the variable rules.

Why they matter for variable plans

Variable rules (Percent of Portfolio, VPW, CAPE, Guyton-Klinger, Z-Value) tie spending to the portfolio. That responsiveness is the point. It's also what makes those rules produce spending numbers you would not actually live with. A Percent-of-Portfolio plan at 4% on a $1M portfolio says "spend $40k"; if markets drop 50% the next year, the same rule says "spend $20k". A floor at $30k stops the cut at $30k. A bull run that doubles the portfolio suggests "spend $80k"; a ceiling at $55k stops the climb there.

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