BacktestFolio · Glossary
Guyton-Klinger
In plain language
Instead of always withdrawing the same inflation-adjusted amount (fixed SWR), Guyton-Klinger adjusts withdrawals year by year based on the portfolio's health: if things go well you take a bit more; if not you cut back slightly. This allows a higher initial rate than a rigid SWR.
Technical definition
Dynamic withdrawal strategy with two guardrails: if the current withdrawal rate falls below a lower threshold (prosperity), the withdrawal increases; if it exceeds an upper threshold (caution), it decreases. The 'Prosperity Rule' also freezes inflation adjustments in years of negative returns.