Flexible spending and your income floor

Two questions a percentage can't answer

The odds of success tell you how often your plan survived across hundreds of randomized runs. Useful, but it leaves two things unsaid:

• What if you reacted? The odds assume you keep spending exactly on plan through a crash. Nobody does that.
• What if markets failed completely? A probability can't tell you what's still landing in your bank account when everything else goes wrong.

Both appear in plain sentences underneath the percentage, on the Odds of success panel. Neither is a setting you turn on — they're calculated for you.

Flexible spending: what reacting is worth

Alongside the headline number, every simulation is run a second time on the identical markets and lifespan, with one difference: you adjust spending as things unfold.

The rule is simple and deliberately modest. At the end of each year, the app looks at how much you withdrew as a share of your remaining portfolio:

• Withdrawing more than 6% — the portfolio is under strain, so spending is cut by 10%.
• Withdrawing less than 3.5% — there's room again, so one previous cut is restored.
• Cuts stop at two (about 19% below plan in total). Beyond that it stops being a spending adjustment and becomes a different life.

Taxes and long-term-care costs are never trimmed. You can decide to eat out less; you cannot decide to owe less tax or need less care.

When flexibility helps, you'll see a sentence like: "If you'd trim spending ~10% after a bad year and restore it when markets recover, your odds rise from 71% to 86%." The gap between those two numbers is the honest value of paying attention — it is a decision you'd get to make, not a fate you'd suffer.

If the two numbers are close, that's informative too: it means your plan's outcome isn't very sensitive to spending adjustments, and the lever that matters is somewhere else.

You may also see the age by which the worst 1-in-10 runs had run out. That figure comes from the rigid version — spending on plan regardless — so treat it as the "if I change nothing" case.

Your income floor: what arrives regardless

This is the safety-first question, and it's answered deterministically from your own plan — no simulation involved.

The app looks at your household at age 75 and asks: of everything you'll spend that month, how much is covered by income that shows up whatever markets do? That means Social Security, pensions, and annuities only. Wages, rental income, and withdrawals from savings don't count — the first two end, and the third is exactly the thing a bad market threatens.

You'll see something like: "Social Security and pensions cover about 68% of your spending at 75 ($4,100/mo of $6,050/mo) — income that arrives regardless of your portfolio."

Age 75 is chosen because it's late enough that Social Security has started in almost any plan, and early enough that decades still depend on the answer.

Why it's worth knowing

Two plans can show the same 85% odds and be nothing alike. One covers 80% of spending from guaranteed income and leans on the portfolio for the rest. The other covers 25% and needs markets to behave for thirty years. The first is far more comfortable to live in, and no probability on its own reveals that.

A low floor isn't a failure — plenty of good plans have one. It just tells you where your risk actually sits, and which levers are real:

• Delaying Social Security raises the floor permanently, and it's inflation- adjusted for life. See claiming timing.
• A pension with a cost-of-living adjustment holds its value; one without quietly shrinks — check what you entered under income.
• An annuity converts savings into floor, at the cost of flexibility.
• Lowering essential spending raises coverage from the other direction.

Reading them together

The most useful way to hold these three figures at once: the odds say how often the plan worked, flexibility says how much of the failure you could have steered around, and the floor says what your life looks like if you steer badly and markets are unkind anyway.

All estimates, not financial advice — and see the glossary for the terms used here.