What is a spending capacity?
Do not fear failure, but, be terrified of regret
Understanding how the Spending Capacity is utilized with our clients
Key Features:
- Timeline View: Visualize financial life today and in the future.
- Fin Flow: Game-changing cash flow planning.
- Tax Sourcing: Implement tax-smart distribution strategies.
- Milestones: Plan for life events and celebrate achievements.
- Scenario Planning: Compare different financial strategies.
- Social Security Planner: Optimize benefits.
- Longevity Planning: Assess financial sustainability over time.
Spending capacity guardrails help retirees manage their income by setting thresholds for when spending should be adjusted in response to portfolio performance and risk factors.
How They Work:
- Spending Capacity: This is the amount a retiree can safely spend while maintaining a targeted risk level for overspending or underspending.
- Guardrails: These are portfolio balance thresholds that signal when spending should be increased or decreased. If a portfolio balance drops too low, spending is reduced to avoid depletion. If it rises significantly, spending can be increased.
- Risk-Based Adjustments: This approach helps retirees avoid drastic income cuts while maintaining financial stability.
"Spending Guardrails" system as part of its retirement income planning tools. This framework is designed to give advisors and clients a flexible but disciplined strategy for adjusting retirement income over time, especially in response to market performance, inflation, and longevity.
We welcome your call to 630-262-1818 or email to info@frolicsteinfinancial.com