How are spending guardrails applied in the simulations?

A guardrail changes the discretionary part of planned EXPENSES in a year according to the previous year’s portfolio-return comparison. The tested rule can reduce it after returns below the expected portfolio return and increase it after returns above expectation.

Each adjustment uses that year’s original planned discretionary amount, including normal inflation and scheduled changes. It does not carry the previous adjustment forward and compound it. Essential expense portions remain protected.

For example, a $10,000 planned expense with 40% discretionary has $4,000 adjustable. A 20% reduction rule reduces the total by $800 in an affected year, not by $2,000. The next year’s adjustment is recalculated from that next year’s original plan.

The tool tests a bounded set of rules, using the same market paths, and reports their outcomes. It aims for 90%–95% success but may not find a tested rule in that range. The simulation comparison does not permanently rewrite your saved expense entries.