Withdrawal Planning & Income Sources
How the Premium withdrawal plan in Forbidden Finance draws your retirement spending from your accounts, the three withdrawal strategies, and how pensions and other income sources are counted.
Overview
Reaching your FI number is half the picture. The other half is how you spend from it. The withdrawal plan shows, year by year, how much you would spend in retirement, how much comes from other income, and which accounts the rest would be drawn from.
Available on: Premium. On Pro, the section shows a locked preview and runs nothing.
What You See
- Spending by age: a chart of what you spend each retirement year next to the plan's target, with markers where a guardrail changed your spending.
- First-year draw by bucket: how the first year's withdrawal splits across taxable, tax-deferred, tax-free, and HSA money.
- Year by year: a table with the gross withdrawal, the tax gross-up, the spending target, what you actually spend, external income, and any guardrail action.
- Whether the portfolio is depleted, and at what age.
The Order Money Is Drawn
Each retirement month, your spending is first covered by your income sources. The rest comes from your accounts in this order:
- Taxable
- Tax-deferred, grossed up by your tax-deferred effective rate (22% by default), so the after-tax amount still covers your spending
- Tax-free
- HSA
The plan places each account in a bucket automatically. You can change that in Account Buckets.
Withdrawal Strategies
Choose a strategy in Assumptions, under Withdrawal.
| Strategy | How it decides each year's spending |
|---|---|
| Fixed real | The same spending every year in today's money, so it rises with inflation. This is the default. |
| Guyton-Klinger | Starts like fixed real, then follows guardrails. After a year with a negative return, the inflation raise is skipped (Freeze). If your withdrawal rate drifts more than the guardrail (20% by default) above where it started, spending is cut by the adjustment (10% by default). If it drifts that far below, spending is raised by the same adjustment. |
| Variable percentage | Each year spends the amount your remaining balance could pay out evenly to your longevity age. Spending moves with your balance, and the portfolio never runs out before that age. |
Guyton-Klinger follows the 2006 paper by Guyton and Klinger with a few simplifications: the freeze applies after every negative-return year, the cut rule stays active in the final years, and rebalancing between asset types is not modeled.
Income Sources
Income sources are money you expect in retirement from outside your portfolio: Social Security, a pension, an annuity, rental income, part-time work, or anything else.
Open Income sources
On the retirement plan, tap Income sources.
Add a source
Tap Add income source. Choose the kind, give it a name, and enter the monthly amount in today's money, its currency, and the age it starts. Add an end age if it stops, or leave it empty for life.
Cost-of-living adjusted
Turn this on if the payment rises with inflation. Sources marked COLA keep their value in today's money.
Each source counts toward your projection and your withdrawal plan from its start age. You can add up to 20. A source in another currency is converted to your base currency. If there is no exchange rate for its currency, the plan leaves it out and says how many sources it left out.
Frequently Asked Questions
Why is my gross withdrawal bigger than my spending?
Money drawn from tax-deferred accounts is grossed up so that, after your effective tax rate, it still covers your spending. The year table shows the gross-up separately.
Can the variable percentage strategy run out of money?
Not before your longevity age. Spending falls instead, so a lean year in the markets shows up as a lower spending figure.
Do income sources affect the Shared view?
Your income sources apply to the Private and Combined views, which carry your own plan.
Related Articles
Account Buckets
Which bucket each account counts in, and contribution limits.Plan Assumptions
Strategy, guardrails, and the tax-deferred rate.Monte Carlo Simulation
See how a strategy holds up across many market paths.Need more help? Email us at [email protected] and we will get back to you.