How much can I spend from my investments in retirement? That is a question financial planners try to address in retirement planning, but they often fail to answer how this money is to be drawn down over time, i.e. the spending profile. It turns out that people don’t actually want to spend a constant dollar amount over the 30 years of retirement, or a constant real amount (inflation adjusted) either. More complex spending profiles, which may have more spending at the beginning, less in the middle, and more again at the end of retirement for healthcare, can be tailored based on the asset allocation in the investment portfolio, and simulations can be used to test whether these spending profiles are sustainable over 30 years or more. It’s time to put some imagination into planning for retirement and make it fit for actual retirement!

After a lifetime slogging and socking away money into investments, retirement beckons!