## What is Kitces ratchet
**Kitces ratchet** is a one-way dynamic withdrawal rule between **fixed real** (no raises) and **guardrails** (raises and cuts). Spending follows an **inflation-adjusted floor** pinned at a safe starting rate. On scheduled **evaluation years**, if your portfolio balance exceeds an **inflation-adjusted prosperity threshold** (default: **50% growth** above the reference starting balance), the floor receives a **permanent raise** (default **+10%**). **Spending never decreases** for market declines — unlike guardrails capital-preservation cuts.
Illustrative Kitces research defaults in Analyzer: evaluate every **3 years**, **50%** prosperity growth, **10%** raise. Advanced scenario settings can override these three parameters.
## Kitces ratchet vs fixed real
**Fixed real** holds a steady inflation-adjusted budget from your safe starting rate. **Kitces ratchet** starts from the same fixed-real rate but can **ratchet spending up** when markets outperform, while **never trimming** for downturns. You may underspend less in strong markets than fixed real, but you accept **no automatic spending relief** after losses.
## Kitces ratchet vs guardrails
**Guardrails** raise **and cut** spending when portfolio withdrawal rates cross Guyton–Klinger bands. **Kitces ratchet** only raises on prosperity triggers — there are **no spending cuts**. Choose guardrails if you want capital preservation; choose Kitces ratchet if you want upside participation without reducing lifestyle after a crash.
## Where to set Kitces ratchet
On **Planning → Safe withdrawal**, choose **Kitces ratchet** in the **Traditional** withdrawal policy group (between Fixed real and Guardrails). On an active **planning scenario**, advanced ratchet parameters save on the scenario fork. The **Withdrawal policy** panel shows mode label, default parameters, and year-one spend. **Multi-year schedules** and **Monte Carlo** recompute retirement spending from simulated balances when this mode is active.
## Custom spending path
On a **scenario**, a **Custom** spending path on **Annual spending by year** **replaces** ratchet-driven spending in projections. Untouched years keep a Fixed-real seed until you edit them. The policy panel can show **ratchet reference spend** (unconstrained year-one ratchet total) for comparison. **Clear custom spending** restores Kitces ratchet (or whatever mode you had before).
Educational content only—not personalized investment, tax, or legal advice.