How does the model work?

It works like this:

• Before retirement most of your money comes from your salary. Your money goes out to pay taxes, savings, loan payments and living expenses.
• After retirement your social security and pensions replace your salary but probably don't cover all your expenses.
• To make up the difference, you sell a portion of the investments you've built up with your savings.
• If your investments last until the end of your plan, then your plan works.
• If they don't, then your plan doesn't work and you need to adjust some of your decisions