When I click the “Settings” button to configure the spending policy and increase the Minimum % of Expenses to Fund, the probability of success for my plan goes way down. Why did this happen?
This planner isn’t like most planners because it tries to be flexible and apply small spending cuts to save the portfolio when things aren’t looking so good. You can turn this off by setting the spending policy to “Stable” and then the planner will just withdraw the amount you asked for every year (adjusted for inflation). With the “Flexible” spending policy selected, the planner tries to improve portfolio survivability by implementing small incremental spending reductions in years when the plan isn’t going so well. In the output, the “Percent Expenses Funded” value (tracked per year) gives you an idea of how much belt tightening the plan is imposing in order to get the probability of success that’s shown. For example, if under a worst case scenario you’d be willing to cut back and spend only 50% of your target annual expenses (during the worst years), you could set the “Minimum Percent of Expenses to Fund” to 50% (in the settings window). Reducing the spending floor like this is likel
