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Allow changing the 4% parameter in "Work Less, Live More" option?
Old 08-12-2006, 08:41 AM   #1
Confused about dryer sheets
Join Date: Aug 2006
Posts: 6
Allow changing the 4% parameter in "Work Less, Live More" option?

Feature requests:

1/ within the "How much will you spend?"-tab, in the "Work Less, Spend More" option, could you change the wording of the descriptive text as follows:

Current descriptive text: "The 95% rule applies to the Annual Spending (but not other adjustments). According to the rule, each year's withdrawal is the greater of 95% of last year's withdrawal or 4% of the current portfolio as you started with."

Proposed change: "The 95% rule applies to the Annual Spending (but not other adjustments). According to the rule, each year's withdrawal is the greater of 95% of last year's withdrawal or A PERCENTAGE OF the current portfolio EQUAL TO YOUR WITHDRAWAL PERCENTAGE IN THE FIRST YEAR OF THE PLAN."

2/ In the "Work Less, Live More" option, could you provide an option to allow that initial percentage withdrawal to also be indexed for inflation, instead of staying fixed at the initial rate?

3/ in FIRECalc's Results output, when the "Work Less, Live More" option is selected, could you also show a chart of the actual spend per year, starting in the year set by the user in the Options-tab, so we get a picture of how much annual spending goes up and down when using this spending method?

4/ Could you also make it so that the Results output which appears when using the "Work Less, Live More" method is identical to the output which appears when using the "Use Bernicke" method? This would allow for a nice comparison of the effects of both spending methods.

5/ Would you consider adding William Bengen's spending method, the "Floor/Ceiling model", as publised in the May 2001 issue of the Journal of Financial Planning (

Bengen's method uses the following spending "algorithm" (which is in some ways quite similar to Bob Clyatt's rules):

a) calculate the initial allowed spending amount for the first year, based on a chosen percentage of your portfolio, for example 4.15% (percentage set by user)

b) the next year, calculate what amount this 4.15% of the CURRENT value of your portfolio is; compare this current amount to the initial amount calculated for the first year, and:
- if it is higher, then you are allowed to spend this higher amount, but capped to an upper limit (for example not more than 125% of the first year's amount);
- if it is lower, then you should spend this new lower amount, but capped to a lower limit (for example not less than 90% of the first year's amount)

c) repeat (b) for every year in the retirement plan.

The parameters for the initial percentage, and percentages for the upper and lower spending caps, should be able to be set by the user.

Thanks for considering my requests!

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