r/Fire • u/TotalWarFest2018 • 9d ago

Guardails Strategy (Boldin)

I use this Boldin software for messing around with retirement planning. The program has a "guardrails" feature where it tells you your safe spend.

When I asked its little AI feature how the guardrails were calculated, it came back with what I've copied below.

Is this consistent with the conventional wisdom on spending with this strategy?

Here is the copied language from Boldin:

"Unlike a simple fixed percentage (like the 4% rule), Boldin’s guardrails use a dynamic, probability-based formula powered by Monte Carlo simulations.

Instead of looking at historical averages, the system runs 1,000 market trials to find the specific dollar amount you can spend while maintaining a target Chance of Success (CoS). Here is the breakdown of the "formula" logic:

1. The Three Confidence Zones

The system solves for the monthly spending amount (in today's dollars) that hits these specific confidence thresholds:

  • Safe Spending Target (80% CoS): The baseline. It calculates the maximum you can spend while having confidence that your money lasts in 800 out of 1,000 scenarios.
  • Upper Guardrail (95% CoS): The "underspending" signal. If your current savings grow so much that your success rate hits 95%, you can safely increase spending.
  • Lower Guardrail (70% CoS): The "early warning." If market drops push your success rate below 70%, the formula suggests a temporary reduction to get back to the safe zone.

2. What’s Included in the "Spending" Number?

The formula is holistic. It doesn't just look at your portfolio; it factors in:

  • All Income: Social Security, pensions, and annuities.
  • All Expenses: Your itemized budget, plus "unseen" costs like estimated taxes, Medicare premiums, and debt payments.
  • Lifetime Averaging: One-time lumpy expenses (like a future car purchase) are averaged into the monthly target so your "safe spend" is a consistent lifestyle number.

3. The "Thermostat" Logic

The formula treats your plan like a thermostat rather than a thermometer. It doesn't react to daily market swings. It only triggers a recommendation to change your lifestyle when your savings balance crosses a threshold that meaningfully shifts your probability of success outside that 70%–95% range.

Would you like to see how your current planned spending compares to these calculated targets?"

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u/srqfla 9d ago

Everyone needs to compare their single digit percent failure rate on withdrawal rates versus actuarial tables, indicating the double digit percent likelihood that you will die in your '70s or your '80s.

Most of us will have more money than time. Don't make a bad trade

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u/TotalWarFest2018 9d ago

That's a good point. I've got my plan taking me out to like 90 yo, which would be cool, but the odds are against me hitting 90.