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Yale Endowment Safe Withdrawal Strategy Calculator
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Spending Rate:5.00%
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Lower Guard Rail:4.00%This calculator is based off of the calculations in Rob Berger's Forbes article (see 'Resources' near
the bottom of this sheet). If you are unfamiliar with this withdrawal strategy,
please read the 'Resources' listed below to learn how it works.

Directions:

1. Green means fill in your own data (columns B and C). Delete the existing values
in the green cells; they are just
here to give you an example.

2. Fill in your Spending Rate constant (B3), guard rales (B4 and B5), and whether
you want to use 'Portfolio Value' or
'3-Year Portfolio Average' to compute
withdrawals and guard rails (select "Yes" for the latter and "No" for the former).
The '3-Year Portfolio Avg' is a running
3 year average as per Rob Berger's Forbes article.

3. For each retirement year, enter the current portfolio value and the previous year's
inflation rate in percent.

4. Period Withdrawal is your actual withdrawl amount for the Withdrawal Period
(supports annual, quarterly, and monthly). If the withdrawal is outside of the
guard rails, the 'Lower Guard Rail Flag" or 'Upper Guard Rail Flag' will
be triggered as 'yes' and the appropriate Guard Rail Withdrawal will be listed
in column K.

5. The first retirement year always uses the Portfolio value for that year, and
simply multiplies it by the Spending Rate to give the first year's withdrawal.
If you want to use a 3-year running average for the first retirement year,
calculate that yourself using the portfolio values two years prior to
retirement and the current year, and enter that into the 'Portfolio Value' for
the first retirement year (cell B11).

Example:
in January of your first retirement year, enter your current portfolio value in
cell B11. Enter the previous year's inflation rate in cell C11. Your withdrawal
for that year will be in cell F11. Repeat for each year.

Hints:

Play with the values in the green to get a feel for how things work. To begin with,
set Withdrawal Period to 'Annual'; quarterly and monthly periods might be a
little confusing at first.

For a more conservative withdrawal strategy, lower the 'Spending Rate' and guard
rails, especially the 'Upper Guard Rail'. The 'Lower Guard Rail' can limit
withdrawals in good years while the 'Upper Guard Rail' can limit withdrawals in
bad years. 

If you want to change the rate/rails after you start, make a backup of this
spreadsheet to keep your historical data, and then update the rate/rails and
delete the 'Portfolio Value' and 'Prevous Year's Inflation' values and start
over from Retirement Year 1.

For a "smoother" withdrawal curve during volatile years, set 'Use 3-Year
Portfolio Avg?' and 'Apply Guard Rales to 3-Year Portfolio Avg?' to 'Yes'. For
a more direct reaction to Portfolio Value, set them to 'No'.

Please check my math before trusting this sheet.

Author:
Dan Pixley, 2023
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Upper Guard Rail:6.50%
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Use 3-Year Portfolio Avg? ('No' means Portfolio Value will be used instead)No
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Apply Guard Rails to 3-Year Portfolio Avg? ('No' means Portfolio Value will be used for Guard Rails instead)No
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Withdrawal PeriodAnnual
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Retirement YearPortfolio Value
Previous Year's Inflation
3-Year Portfolio Avg
Annual Withdrawal Rate
Period Withdrawal
Annual Lower Guard Rail
Annual Upper Guard Rail
Lower Guard Rail Flag
Upper Guard Rail Flag
Guard Rail Withdrawal
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1$1,000,000.001.00%$1,000,000.00$50,000.00$50,000.00$40,000.00$65,000.00nono
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2$970,000.002.00%$985,000.00$50,250.00$50,250.00$38,800.00$63,050.00nono
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3$600,000.003.00%$856,666.67$45,230.25$45,230.25$24,000.00$39,000.00noyes$39,000.00
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4$600,000.004.00%$723,333.33$41,927.62$41,927.62$24,000.00$39,000.00noyes$39,000.00
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5$950,000.001.00%$716,666.67$43,892.83$43,892.83$38,000.00$61,750.00nono
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6$1,000,000.002.00%$850,000.00$46,339.48$46,339.48$40,000.00$65,000.00nono
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7$1,200,000.003.00%$1,050,000.00$51,410.76$51,410.76$48,000.00$78,000.00nono
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8$2,000,000.004.00%$1,400,000.00$67,427.04$67,427.04$80,000.00$130,000.00yesno$80,000.00
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9$1,800,000.002.00%$1,666,666.67$75,142.90$75,142.90$72,000.00$117,000.00nono
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10$1,800,000.002.00%$1,866,666.67$80,652.03$80,652.03$72,000.00$117,000.00nono
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11$1,800,000.002.50%$1,800,000.00$84,867.83$84,867.83$72,000.00$117,000.00nono
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Resources:
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https://web.archive.org/web/20210426223955/https://www.forbes.com/advisor/retirement/dynamic-spending-rules/
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https://ficalc.app/ (Endowment Strategy)
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https://www.lazyportfolioetf.com/allocation/david-swensen-yale-endowment/
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https://www.reddit.com/r/Bogleheads/comments/142mhx3/endowment_strategy_safe_withdrawal_rate_for/
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https://www.bogleheads.org/forum/viewtopic.php?t=369831
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