The key challenge for most retirees is to create a stable income for their lifetime from investment capital that fluctuates in value. We identify the shortcomings of constant spending rules and introduce a dynamic spending rule that can boost total retirement income by 25-40%. Coupling the dynamic spending rule with asset liability management assures the retiree of less income volatility and reduces the risk income falls below a specified level.

This approach allows a dialogue with retirees and near retirees that is more meaningful, because it is based on required and desired income rather than a probability of running out of money that most people find hard to comprehend.