The strategies

1. This strategy sets the initial retirement income level at 80% of the pre-retirement income.  After the first year, the retirement income grows with inflation.  This strategy is espoused by many experts.  They will recommend an initial level of between 70% and 90% of the pre-retirement income.  The theory behind this is that if one was saving 20% of their income before retirement, once they are in retirement they will no longer need to save that money and can live at the 80% level.  In addition, some argue that the income needs for retirees is less because they do not need business clothes and have fewer expenses.  Others argue that expenses may go up due to travel and other new expenses.

2. There is a large body of research that indicates that setting your initial retirement income at 4% of your retirement portfolio and increasing it by inflation in subsequent years is a "safe" strategy.  "Safe" in this context has meant that over a 30-year retirement, between 80% and 95% of the simulations result in a positive portfolio balance at the end of retirement.  (Reference: Bengen, William P. "Determining Withdrawal Rates Using Historical Rates," Journal of Financial Planning, 1994.)

3. A modification to the 4% initial withdrawal strategy has been proposed to protect the retirement portfolio in periods with poor market performance.  This strategy starts with an initial withdrawal rate of 4%.  In future years, the income level is determined by withdrawing 4% from the retirement portfolio.  The exception to this is if the portfolio has a negative return in a year, then the income for the next year will be set at 95% of the prior year's level.  Future incomes return to the 4% level.  (Reference: Clyatt, Bob. "Work Less, Live More.  The New Way to Retire Early." Nolo Press, 2005.)

4. A refinement to strategy 2 above is made to protect the portfolio by setting a ceiling and floor on retirement income.  The strategy says that the real income in any year should not fall more than 10% below the initial retirement income level nor rise more than 25% in real terms above that level.  (Reference: Bengen, William P. "Conserving Client Portfolios During Retirement, Part IV." Journal of Financial Planning, May 2001.)

5. An aggressive retirement strategy where the income level is greater early in retirement and falls (in real dollars) through retirement.  This approach attempts to create a retirement which matches Bureau of Labor Statistics that shows that expenditures decrease after age 55.  Although health care expenses rise, almost all other categories of expenses decrease with an overall decrease of 44% through retirement.

6. A sophisticated retirement strategy uses decision rules to regulate retirement income.  This strategy sets the initial withdrawal rate at 5.3% of assets.  In future years, if the withdrawal rate exceeds 6.36%, then the retirement income level is cut 10% to try to rescue the portfolio.  In periods when the portfolio has a negative return and the current withdrawal rate is above the initial rate, then income is frozen at the prior year's level.  To give the retiree the benefit of good market performance, if the current withdrawal rate falls below 4.24%, then a 10% raise in income is given.  (Reference: Klinger, William J., "Using Decision Rules to Create Retirement Income Profiles." Journal of Financial Planning, August 2007.)

7. This strategy uses the safe withdrawal rates identified by researchers and uses them to reset income levels throughout retirement.  In this strategy, the initial withdrawal rate is set at a "safe" rate and then rises by inflation for four years.  Every fifth year, the withdrawal rate is reset to the safe rate for that age.  To help mitigate risk, if the market falls in the first five years, then the withdrawal rate is reset at 4%.  The strategy, as proposed by Stein and DeMuth also calls for a particular asset allocation.  (Reference: Stein, Ben and Phil DeMuth. "Yes, You Can Retire Comfortably!" New Beginnings Press, 2005.)

8. This is a complicated strategy designed to stretch out limited retirement assets.  At the beginning of retirement, 15% of the retirement assets are invested and set aside for the purchase of an income annuity at age 85.  The remaining assets are invested and withdrawn at a rate of 1/n  were n is 85 minus the retiree's age.  (Reference: Clements, Jonathan. "How to Survive Retirement", The Wall Street Journal, January 17, 2007.

9. Many advisors recommend annuitizing retirement assets.  In this strategy, 50% of the retirement assets are used to purchase an income annuity.  The remainder of assets are invested and money is withdrawn in future years as necessary to maintain the initial real level of income.  In addition, the asset allocation is changed over time to be more conservative.  (Reference: Updegrave, Walter. "An Income Plan That's Built to Last." money.cnn.com, April 19, 2007.)