The DoubleBucket® Method
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The Yale Spending Policy is used to determine the yearly withdrawal from the Yale Endowment fund.  The target goal is 5.25%.  The policy is similar to the 4% rule, but it has a smoothing component to account for changes in the returns of the endowment.   Use the calculator below to see how the policy has performed over history, and how it stacks up against other policies.  You can adjust the retirement span, withdrawal rate and diversification mix, and compare against other policies.  There are 4 different policies we will analyze:

• Lifetime Spending Policy (i.e., the "4% Rule")

  • Flat withdrawal rate adjusted yearly for  inflation​

• Yale Spending Policy

  • 80% of last year's withdrawal, plus 20% of ending principal of 2 years prior, multiplied by the target withdrawal rate, and then adjusted for inflation.

• Thornburg Spending Policy (similar to the Yale Policy)

  • 90% of last year's withdrawal, plus 10% of last year's ending principal, multiplied by the target withdrawal rate, and then adjusted for inflation​​

• Constant Withdrawal Rate

  • Flat withdrawal rate, not adjusted for inflation​

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For starters, just select the compute button to see what the data looks like with the default values.

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