Part 7/9:
In this case, if their $1 million portfolio grows to $1.25 million, that translates into a 10% spending increase, while a decline to $833,000 would trigger a 10% spending cut. This middle-ground strategy provides retirees with both flexibility and surety, catering to those willing to adjust their lifestyle somewhat based on market performance.
Flexible Spending Strategy
The flexible spending strategy, devised by Nick Majulli, involves categorizing expenses into two parts: base spending and bonus spending. Base spending consists of necessary expenditures, while bonus spending includes discretionary items that can be adjusted based on market performance.