"Spending Rules" for retirees, is the rate of spending that can be sustained in retirement. The spending rule has to be low enough so as not to exhaust wealth in the event of lower asset returns than expected.

Many Americans don’t really understand how long their retirement may be. Life expectancy has increased steadily over the last 50 years at the same time that the age of retirement has fallen. According to the Labor Department, the median age of retirement for both men and women is 62 years of age.

Americans at that age can often look forward to twenty or even thirty more years of life in retirement. Yet few Americans have a coherent plan to make sure their resources will last that long. Savings are often inadequate and spending is often too high to be sustainable. Investment decisions, moreover, are often inconsistent with spending rates.