Budget cuts

The success rate only asks: does your wealth last until the end age? For percentage-based strategies that is almost always the case, because they never withdraw more than is there. Their risk shows up elsewhere: in a budget that shrinks after weak market years.

Budget cuts make all strategies comparable. Every simulated path counts in which your withdrawal in the full withdrawal phase falls below a threshold of your planned budget for at least one year (standard: 75%) — or in which your wealth runs out before the end age. For the fixed withdrawal, the value is therefore exactly the share of paths that run out of money. The 75% threshold is a FireLotse definition of a noticeable cut – there is no fixed professional standard for it. That is why you can choose it yourself between 60 and 90% in the strategy comparison; it then applies equally to all strategies.