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Withdrawal policy comparison at a glance

## Comparison at a glance Dolla supports seven **withdrawal policy modes** on **Planning → Safe withdrawal**. Each trades off income stability, longevity risk, and how much spending can move with markets. Use this table when choosing a mode or comparing scenarios. | Strategy | Primary benefit | Primary drawback | Best for | | --- | --- | --- | --- | | **Fixed real** | Stable, predictable inflation-adjusted cash flow. | Can lead to underspending early on; higher risk of running out if the market crashes. | Retirees who want consistent, low-stress budgets. | | **Valuation-adjusted** | Year-one safe rate tempered by CAPE zone (more conservative in high-valuation markets). | Still fixed-real indexing after year one; depends on bundled valuation reference. | Households who want table-based planning with valuation-aware starting caution. | | **Kitces ratchet** | Higher sustainable starting income with one-way prosperity raises when markets outperform. | Spending never decreases for market declines; requires discipline not to overspend above the floor. | Households who want guardrails-like upside without spending cuts during downturns. | | **Guardrails** | Provides higher sustainable starting income with built-in capital protection. | Requires strict adherence to adjusting baseline income annually. | Those who want to spend more early in retirement while avoiding outliving their money. | | **Constant %** | Impossible to run out of money. | Extreme income volatility; can leave you with very little late in life. | Those with highly flexible spending who prioritize early, "go-go" years. | | **VPW** | Maximizes lifetime spending and mathematically prevents fund depletion. | Unsmoothed, volatile annual income based entirely on market ups and downs. | Analytical individuals comfortable with data-driven budget fluctuations. | | **TPAW** | Averages risk over time; incorporates future income and expected capital growth. | Requires using specialized software. | Retirees wanting to model multiple income sources (like Social Security) holistically. | ## Where to compare in the app On **Planning → Safe withdrawal**, open **Compare strategies** in the withdrawal policy settings section to view this table alongside your current mode selection. Change modes with the policy buttons; year-one spend targets and Monte Carlo context update on the same page. ## Fixed real vs guardrails **Fixed real** locks an inflation-adjusted spending budget from a safe starting rate (often from the horizon × equity table). **Guardrails** start from a similar research rate but **raise or trim** spending when portfolio performance crosses upper or lower bands. Guardrails can support **higher starting income** if you will **follow the adjustment rules** each year. ## Constant % vs VPW **Constant %** withdraws the same **portfolio percentage** every year — you cannot deplete the fund mathematically, but **dollar income swings** with balance. **VPW** (variable percentage withdrawal) also uses a **percentage of balance**, but the rate follows a **published age-based schedule** (Bogleheads VPW) rather than a flat percent. Both produce **volatile annual income** compared with fixed real. ## TPAW in Dolla **TPAW** (total portfolio amortization withdrawal) spreads the **remaining portfolio** over **remaining longevity years** using your plan **expected return**, recomputed annually. Analyzer models portfolio amortization with **guaranteed income as an offset** (for example Social Security adds to total spend without double-counting portfolio draws). Specialized third-party TPAW tools may add features beyond Analyzer v1. ## Valuation-adjusted vs fixed real **Valuation-adjusted** uses the same horizon × equity table as fixed real for a **baseline rate**, then applies a **CAPE zone adjustment** to year-one spending only. **Fixed real** skips the zone step. After year one, valuation-adjusted follows **inflation indexing** like fixed real. Monte Carlo and Living Standard use the **multi-year schedule** for dynamic alignment when this mode is active. ## Choosing a mode for scenarios Create a **planning scenario** and set a different **withdrawal policy mode** in the scenario fork without changing your household baseline. Compare year-one spend bands, sequence-risk notes, and Monte Carlo success on **Safe withdrawal** while the scenario is active in the header.

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