The Actuarial Approach Addresses the “Big Flaw” in Most Decumulation Approaches

Recently, in her Motley Fool article, A Big Reason the Famous 4% Rule May Not Work for Your Retirement, Maurie Backman confirmed what we have been telling our readers for years—you aren’t going to solve the decumulation problem in retirement by assuming you (or your client) will spend the same real dollar amount each year in the future. While Ms. Backman focuses on the 4% Rule, her criticism applies to most different types of Strategic Withdrawal Plans (SWPs) and even many Monte Carlo simulation approaches typically used by financial advisors today.

The Only Other Spending Rule Article You Will Ever Need?

A little more than ten years ago, the Financial Analysts Journal released “The Only Spending Rule You Will Ever Need” by M. Barton Warning and Laurence Siegel. Recently, Stefan Sharkansky has updated and changed the Strategic Withdrawal Plan (SWP) set forth in Waring and Siegel’s article with a different SWP in an article entitled, “The Only Other Spending Rule Article You Will Ever Need.”

Front-Loading Spending in Retirement

As discussed in our previous post of September 28, 2025, there are lots of levers in the Actuarial Financial Planner (AFP) that can be pulled to make your spending plan in retirement more or less conservative. In that post, we indicated that we thought most retirees would prefer to err a little on the conservative side by spending somewhat less initially to avoid future spending reductions. Subsequent to releasing that post, however, we came across a Think Advisor article by Michael Finke entitled, “Most Retirees Want to Front-Load Their Spending.” Since we aren’t researchers, we aren’t going to fight Dr. Finke over what most retirees actually want. 

In his article, Dr. Finke says that “Advisors need to help clients enjoy their savings during early retirement while protecting against inflation and other long-term risks.” Therefore, in this post we will briefly discuss how the AFP can be used to help households front-load their discretionary spending in retirement while at the same time protecting their essential spending.