Please stay tuned for important disclosure information at the conclusion of this episode.

Hi, I'm Christine Benz from Morningstar, and welcome to the How to Retire podcast.

It's a companion to my book, which is also called How to Retire.

Each episode will provide a bite-sized lesson

about how to do some aspect of retirement well. Today's episode will focus on how to make sure

that the amount that you're spending from your portfolio is reasonable. To tackle this topic,

I sat down with Derek Tharp, who's a senior research nerd at Kitsis.com and an assistant professor

of finance at the University of Southern Maine. I've loved Derek's work on how adjusting

your spending in retirement can actually enable you to spend more over your lifetime. I feel

like it's so practical and helpful, especially for people with tight financial plans heading into retirement.

Derek, thank you so much for being here.

Thanks for having me.

Well, you've done a lot of terrific research on the topic of withdrawal rates, safe withdrawal rates,

which is one of the most vexing questions for people embarking on retirement.

How much can they take out? So one of the conventions in the retirement spending research is that

people spend a fixed amount per year on an inflation adjusted basis. Of course, that's not

really the way that people spend. So can you talk about that,

how that's in a lot of ways, kind of a straw man when we approach retirement decumulation?

Yeah. I think there's really two key ways that when we look at retirees spending, it does tend to

deviate from what we actually see there. And the first would be that

that assumption that you're going to get a constant inflation adjustment over time just doesn't

really hold. We don't see that people are actually getting that increase in spending. And instead,

...