Timeline cashflow planning question (using Guardrails & one off goals)

GazzaBloom

Calling @Pat38493

I have question with regard during Guyton's Guardrails when modelling a cashflow plan in Timeline with some General Spending set to cover baseline annual living costs but also some one-off goals set in certain years such as money for a new car purchase etc.

How do you apply the Guardrails rules? Do you flex the General Spending amount only as that is the amount that can be adjusted based on the initial withdrawal rate? 

What if you have a one-off goal in year 1 of retirement that pushes the withdrawal rate up in that year alone? Surely the baseline for future adjustments up or down is the amount without the one-off goal? and any one-off goals in the future are excluded?

Or am I misunderstanding something.

Pat38493

GazzaBloom said:

Calling @Pat38493

I have question with regard during Guyton's Guardrails when modelling a cashflow plan in Timeline with some General Spending set to cover baseline annual living costs but also some one-off goals set in certain years such as money for a new car purchase etc.

How do you apply the Guardrails rules? Do you flex the General Spending amount only as that is the amount that can be adjusted based on the initial withdrawal rate? 

What if you have a one-off goal in year 1 of retirement that pushes the withdrawal rate up in that year alone? Surely the baseline for future adjustments up or down is the amount without the one-off goal? and any one-off goals in the future are excluded?

Or am I misunderstanding something.

I am not really sure as I don't generally use those settings when I am using Timeline. Generally I adjusted spending myself in various scenarios to see what would work.

I have played about with the automated settings the past a bit but I think I realised similar things to what you are saying - if you apply those rules and you have uneven spending and/or you have big income amounts that you are putting into payment later in the plan, you can see some strange effects there.

To address your questions specifically, I think it is only the general spending that would be adjusted in the Timeline calculations, and one-off goals would not be changed as they represent known expenditures, where you already know the cost.

If you are more asking a general theoretical question about Guyton's rules - I'm not really an expert there but I suspect that the original research was done without one off spends in it, so if you have very large one off items you would just have to play around with various values and see what happens.

GazzaBloom

Pat38493 said:

GazzaBloom said:

Calling @Pat38493

I have question with regard during Guyton's Guardrails when modelling a cashflow plan in Timeline with some General Spending set to cover baseline annual living costs but also some one-off goals set in certain years such as money for a new car purchase etc.

How do you apply the Guardrails rules? Do you flex the General Spending amount only as that is the amount that can be adjusted based on the initial withdrawal rate? 

What if you have a one-off goal in year 1 of retirement that pushes the withdrawal rate up in that year alone? Surely the baseline for future adjustments up or down is the amount without the one-off goal? and any one-off goals in the future are excluded?

Or am I misunderstanding something.

I am not really sure as I don't generally use those settings when I am using Timeline. Generally I adjusted spending myself in various scenarios to see what would work.

I have played about with the automated settings the past a bit but I think I realised similar things to what you are saying - if you apply those rules and you have uneven spending and/or you have big income amounts that you are putting into payment later in the plan, you can see some strange effects there.

To address your questions specifically, I think it is only the general spending that would be adjusted in the Timeline calculations, and one-off goals would not be changed as they represent known expenditures, where you already know the cost.

If you are more asking a general theoretical question about Guyton's rules - I'm not really an expert there but I suspect that the original research was done without one off spends in it, so if you have very large one off items you would just have to play around with various values and see what happens.

Thanks mate, I'm just wondering how Timeline is applying Guardrails in the range of scenarios with the one-off spends. I will download the data from my plan and see if I can figure it out.