The Only Other Spending Rule Article You Will Ever Need

For those of us nearing retirement, you may be interested in this research published in September 2025 in the Financial Analysts Journal, a publication of the respected CFA Institute. Although audaciously titled The Only Other Spending Rule Article You Will Ever Need, the thesis is very simple:

• use a TIPS ladder to cover all essential expenses (that are not otherwise covered by Social Security, pensions, existing annuities, etc.);
• invest the remainder 100% in stock/equities; and,
• draw all discretionary spending as a percentage of the fluctuating value of the equities, starting at 4% and then ramping up significantly each year through the end of the plan.

The author, Stefan Sharkansky, PhD., back-tested this approach using rolling 360-month periods since 1871 (although TIPS were not issued until starting in 1997), to conservatively simulate longevity in a 30-year retirement. His research shows this approach results in higher retiree spending than other published academic approaches and formulas, primarily due to the obviously high allocation to stocks after funding the TIPS ladder for essential expenses only.

This concept arose from the work of Nobel Prize winner William F. Sharp, who came up with the “lockbox concept” about 10 years. For those who follow Ben Carlson, a casual interview of Dr. Sharkansky on this research is available here on YouTube.