These strategies should be viewed in the context of some key points.

These models should not be considered as prescriptions, but guides that retirees can follow. Most retirees will not spend the exact amount they choose from their favorite models each year.

According to experts in retirement, these numbers will tell you if you are spending too much or a safe amount.

Blanchett stated that people often need a “gut check”, especially when things become volatile.

This method does not examine investment spending. For example, retirees may also be guaranteed an income through Social Security or pensions.

With guaranteed income, a retiree can cover their fixed costs like food and housing. They also have greater flexibility with portfolio spending which will largely finance discretionary expenses such as travel.

This is it: Safe spending can vary from one household to the next.

Research shows that a portfolio with a mix of stocks and bonds yields the most results.

Retirees have many options for making positive financial decisions before they even touch their nest eggs.

Delaying your claim for Social Security can increase monthly payments throughout your life. Reducing fixed expenses (e.g., paying off a mortgage, selling a second home, throttling back support for adult children) when heading into retirement can also help reduce your reliance on investments — and therefore the risk of not having enough money later.

Christine Benz of Morningstar’s personal finance department said, “If there is a way to pay fixed expenses without generating any portfolio income it can make life much easier.”

Being flexible is something that’s very important. That means adapting to market conditions — if the stock market takes a dive, for example, be prepared to throttle back spending accordingly.

This limits so-called “sequence of return” risk — the hazard of pulling too much money from investments falling in value, leaving less of a runway for them to recover when the market rebounds.

Wade Pfau of The American College of Financial Services, who is an expert on retirement income, stated that “any strategy where you have the ability to adapt in response to your portfolio performance really helps manage sequence risk.”

Experts recommend these strategies to retirees: Dynamism

For retirement, the 4% rule is an established rule of thumb.

The law states that people should take 4% out of their entire nest egg within the first year of retirement. Inflation rate would be used to adjust previous year’s dollar figures upwards for later withdrawals.

An investor could withdraw $40,000 in the first year from a portfolio of $1 million. A 2% inflation rate, which adds $800 to the total, would give an additional $40,800 in year two. A third year of inflation would result in a total withdrawal of $41,616.

The best thing about this method is that it almost feels like you’re getting a paycheck, as it provides a steady income stream.

But it’s likely too rigid, experts said — retirees take the same amount, without regard to market fluctuation.

According to Benz of Morningstar, it is better to not adjust for inflation in the first year following a portfolio loss.

The strategy requires you to establish a withdrawal rate of 4% at the beginning.

The retirees would take the same amount from any portfolio they have each year. However, they also set a “floor” and “ceiling” — hard-dollar levels under and over which they cannot spend each year.

Pfau, of The American College likes this approach because it reacts to market movements but keeps spending within a certain range.

According to him, the most important thing is the floor. The household budgets how much it will need to survive and be comfortable.

Imagine a retirement fund with a starting capital of $1 million. A retiree decides to spend $40,000 each year. It’s an average withdrawal rate of 4.4%

The couple then set an annual $25,000 spending limit and $60,000 maximum. The household would take 4% withdrawals from the remaining portfolio each year — but those withdrawals can’t be less or more than their pre-set floor and ceiling amounts.  

The system requires more complex arithmetic. This system works on the basic principle that markets perform well will give you a raise and market conditions won’t. You are paid less.

This method is based on the 4% Rule, with one key distinction: Retirees who perform well in years of market performance get a 10% increase in their pay, plus an inflation adjustment, and a 10% reduction in the price of lower markets.

If the withdrawal rate drops below 20%, there is a 10% rise. This would mean that the withdrawal rate is lower than 20% than its initial level. A 10% reduction in pay occurs when your withdrawal rate is higher than 20% (or more 4.8%)

When markets are doing well, withdrawal rates decrease because a retired person would draw the same dollar amount but with a larger portfolio. However, they increase when markets fail because the fixed dollar amount makes up a higher portion of the smaller portfolio.