GuidedSpending was designed to replace the ‘4% rule’ long used by financial planners. The idea behind the advice program is that the amount of money one should take from their retirement savings each year of retirement should be made on an individual basis; 4% a year is not the answer for everyone. GuidedSpending takes a more flexible and therefore, more effective, approach to retirement, the company said. 

It will be offered to all participants in a plan, rather than just executives.  

“Like many other rules of thumb, the 4%-a-year approach to withdrawing retirement income is easy to criticize as being at best inefficient, and at worst downright dangerous. It’s certainly not grounded in any actual economic analysis,” said Chief Architect Harry M. Markowitz. “Our research has shown that a fixed annual drawdown is not only unworkable, but it doesn’t reflect the reality of people’s income and spending patterns, either.”