How to use variable percentage withdrawals during retirement The VPW Backtesting Spreadsheet contains two data sets: U.S. The VPW Accumulation And Retirement Worksheet calculates variable portfolio contributions, during accumulation, and variable portfolio withdrawals, during retirement, while taking into account current and future pensions with and without cost-of-living adjustments. The VPW method and spreadsheets were collaboratively developed and improved by a group of Bogleheads®. Each year, the withdrawal is determined by multiplying that year's percentage by the current portfolio balance at the time of withdrawal. The VPW method uses a variable (increasing) percentage to determine withdrawals from a portfolio during retirement. By adapting withdrawals to market returns, VPW will never prematurely deplete the portfolio. It combines the best ideas of the constant-dollar, constant-percentage, and 1/N withdrawal methods to allow the retiree to spend most of the portfolio using return-adjusted withdrawals.
Variable percentage withdrawal (VPW) is a method which adapts portfolio withdrawal amounts to the retiree's retirement horizon, asset allocation, and portfolio returns during retirement.
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