LOL! said:
In the Help window (and maybe elsewhere) ctrl-F should allow you to search for a phrase. And/or right-click should have a pop-up menu with maybe has Search as a menu item.
These are good ideas for the search. I use a canned java HTML display class to put up the help, so I'd need to do some rewrite to get that in. In the meantime, all of the help is also on the web site under the "technical details" section. You can use your browser search functions (and print, etc) there.
In the Summary table output on the right-hand-column says 97% to 150% "Percent expense funded" So in the "Spending policy configuration" dialog I change "Minimum % of expenses to fund" from 50% to 97% and change nothing else, and I get a lower success rate. I change from 97% to 96% and I get a lower success rate still.
I guess I am trying to answer this question:
With our current assets, can we have annual expenses of $100K nominally, but if we needed to cut back to $X in some years, what would that $X be?
ok, this is basically the exact question I wrote this planner to answer, so I'm hoping I can explain this well, and I'm hoping that you think the planner helps answer your question when we're done.
First, this planner isn't like most planners because it tries to be flexible and apply small spending cuts to save the portfolio when things aren't looking so good. You can turn this off by setting the spending policy to "Stable" and then the planner will just withdraw the amount you asked for every year (adjusted for inflation).
With the "Flexible" spending policy selected, the planner tries to improve portfolio survivability by implementing small incremental spending reductions when the plan isn't going so well.
In the output, the "Percent Expenses Funded" value (tracked per year) gives you an idea of how much pain (in the form of belt tightening) the plan is imposing on you in order to get the probability of success that's shown.
For example, if under a worst case scenario you'd be willing to cut back and spend only 50% of your target annual expenses (during the worst years), you could set the "Minimum percent of expenses to fund" to 50% (in the spending policy config). Reducing the spending floor like this is likely to improve the odds of the plan being successful.
Conversely, the default spending floor is 75%. If you think a 25% reduction in expenses would be too steep, you could bump that up to 80% or 85%, and see how much that lowers your probability of success. Usually the lower you set the floor, the higher your success rate will be.
One caveat on the use of a low floor is that the output shows the MEDIAN value (half of simulation runs had a higher value and half were lower). So just because the simulation doesn't show any years where you hit the spending floor, you can be nearly certain that in some simulation trials the floor was hit, and that if that was real life you would have had to cut all the way back to the floor.
Finally, if you click show "% of expenses funded" just above the graph, you can see the year-by-year effects of the spending policy overlaid on the graph.
Ok, now onto the multiplier. First, this control probably shouldn't even be there, but I liked to experiment with this so I left it in.
In each simulation trial, the program decides year-to-year whether the amount the retiree gets to spend should stay the same, go down, or go up. The decision is based on whether the portfolio is bigger or smaller than it was at retirement start, and based on whether the portfolio went up or down in value since last year.
The program implements this by adjusting the "percent of expenses to fund" variable. If things are going badly, the program doesn't cut the percent of expenses all the way back to the floor right away. Instead, it starts witholding the yearly spending COLA (cost of living adjustment), which will require the retiree to cut spending in the next year by the inflation rate.
The multiplier magnifies this effect so that the spending gets cut (or increased) by multiples of inflation rate instead of just by the inflation rate. The result is that a multiplier greater than 1 speeds up the adjustment process and usually causes the floor of simulation to be hit more quickly.
I know this was long winded, but I hope it clarifies things a little bit. Please keep asking questions if it's still foggy.
Jim
![:-\](https://www.early-retirement.org/sk/forums/images/smilies/undecided.gif "Undecided :-\")
) I knew I'd get one of those eventually. 
