## What is valuation-adjusted withdrawal
**Valuation-adjusted** withdrawal starts from the same horizon × equity **safe withdrawal table** as **fixed real**, then adjusts the **year-one portfolio rate** based on a **CAPE valuation zone** (low, moderate, or high). In **high** valuation environments the starting rate is **more conservative** than the table alone; in **low** zones it may be **modestly higher**. Years after the first follow **fixed-real inflation indexing** unless you pin desired spending on a scenario.
Dolla reads a bundled **market valuation reference** (CAPE and as-of date). Scenario forks can override the zone or supply a custom CAPE for what-if analysis.
## Valuation-adjusted vs fixed real
**Fixed real** uses the table rate directly (subject to flexibility tier on guardrails-style bands). **Valuation-adjusted** applies a **zone delta** to that table rate for **year one only**, then keeps spending on an inflation-adjusted path. Use valuation-adjusted when you want research-based starting caution in expensive markets without switching to full guardrails dynamics.
## Monte Carlo pairing
On **Planning → Monte Carlo**, year-one spending follows the **active withdrawal policy** (including valuation-adjusted). The simulation inputs show **valuation context** (zone, table vs adjusted rate) when this mode is active. Expense category toggles do not apply to dynamic modes — spending comes from the multi-year schedule, not a fixed expense checklist.
## Valuation-conditioned returns
A valuation strategy has no effect if the model always draws returns from the same average, so valuation-adjusted also shapes the **expected returns**, not just the withdrawal rate:
- **Deterministic net worth**: the projected trajectory applies a **CAPE-derived return headwind** in early retirement that **fades over about 10 years**, so the net-worth line reflects the low-return regime a high valuation implies instead of showing a "spend less, grow the same" free lunch.
- **Monte Carlo**: valuation-adjusted runs a **valuation mean-reverting return regime**. Today's valuation depresses early-retirement returns; if markets keep climbing the headwind persists, and if markets **crash early** the valuation resets so forward returns **recover**. The year-zero headwind matches the deterministic table's, so the two views stay anchored.
Because of this, valuation-adjusted's **median outcome and success probability** now respond to valuation — not only its starting withdrawal rate.
## Valuation mean-reverting toggle (other modes)
A **Valuation mean-reverting returns** toggle on the Monte Carlo panel (default **off**) lets you apply the same valuation-aware return regime to **any** withdrawal policy for a more sequence-risk-aware outlook. It is **forced on** for valuation-adjusted (shown checked and disabled). With the toggle off, results are unchanged from the standard fixed-mean simulation.
## Spending outcomes
Alongside success probability, Monte Carlo shows a **lifetime spending distribution** (real P10 / median / P90 in today's dollars) and the **deepest real spending cut** across paths. This is the counterpart to the ruin-based success rate: dynamic policies raise success by **trimming spending** in poor markets, which a single success percentage hides. A fixed-real plan shows a near-zero cut but carries its risk as depletion probability instead.
## Data freshness
The bundled CAPE reference has an **as-of date**. When it is **more than 30 days old**, the policy panel and the Monte Carlo valuation callout show a **staleness notice** — treat the adjustment as approximate until the reference is refreshed.
## Time buckets (illustrative)
The **Time buckets** panel on Safe withdrawal shows **near / intermediate / long-term** illustrative equity splits for advisor conversations. Buckets are **not** a separate withdrawal engine; actual draws follow your selected **withdrawal policy mode** (including valuation-adjusted).
## Manual rate override
If you set a **manual safe withdrawal rate override** on the scenario fork, valuation zone adjustment is **suppressed** (`valuation_rate_delta_pp` is zero). The policy panel notes when override blocks the CAPE adjustment.
## Pinning desired spending
Pinned **desired annual spending** on a scenario replaces dynamic valuation-driven spend in projections (same pattern as VPW and Kitces ratchet). The panel may show **valuation reference spend** for comparison.
## Where to set valuation-adjusted
On **Planning → Safe withdrawal**, choose **Valuation-adjusted** in the **Traditional** policy group. For scenarios, use **valuation zone override** or **CAPE override** in advanced withdrawal settings to stress-test high vs low valuation starts.
Educational content only—not personalized investment, tax, or legal advice.