LAFAYETTE, Colo., Oct. 15, 2025 /PRNewswire-PRWeb/ -- Stefan Sharkansky, PhD, a statistician specializing in finance, today announced new research that challenges fixed-rate withdrawal strategies for retirement spending, such as the long-standing 4% rule. The research presents a flexible and straightforward strategy backed by robust empirical evidence that allows retirees to enjoy more of their savings without the risk of depleting their funds.
The research builds upon the Annually Recalculated Virtual Annuity (ARVA) approach, which was first introduced by M. Barton Waring and Laurence B. Siegel in 2015. Sharkansky's paper introduces a modern framework for decumulation centered around a ladder of Treasury Inflation-Protected Securities (TIPS) and a low-cost stock index fund, empowering retirees to safely spend more of their wealth while avoiding both premature portfolio depletion and unnecessary underspending.
Key Insights from the Research
- Dynamic withdrawal strategy: The ARVA method calculates safe, flexible withdrawals each year based on market values and expected longevity—avoiding the static limits of rules like the 4% Rule.
- Higher income, lower risk: Historical simulations show ARVA consistently delivers higher lifetime income than traditional methods, with less downside risk.
- Realistic trade-offs: Advisors and retirees can balance income stability, spending flexibility, and legacy goals through a transparent allocation between stocks and TIPS.
- Adapts to changing spending needs: Unlike fixed-rate rules, the strategy is designed to facilitate variable withdrawals to adapt to age-related spending patterns, and to changing tax liabilities as retirees withdraw from accounts with differing tax consequences.
"While there is a wealth of retirement advice available today, much of it is either overly simplistic or difficult to implement. Many guidelines focus too heavily on portfolio preservation, relying on problematic frameworks like the 4% rule, which can lead investors to underspend and leave them vulnerable to market downturns," said Sharkansky.
"The findings present a valuable contribution to research on sustainable retirement spending," said Wade Pfau, Ph.D., CFA, author of Retirement Planning Guidebook: Navigating the Important Decisions for Retirement Success. By combining a ladder of inflation-protected bonds (like TIPS) with a stock market index fund, it shows how retirees can manage longevity risk, adjust for changing spending needs, and draw variable income without running out of money."
To support implementation of the new retirement spending strategy, Sharkansky launched The Best Third, a website that allows both investors and financial advisors to explore and test the framework for free. Users can adjust inputs like retirement age, portfolio value, income needs, and confidence levels to generate customized, tax-aware income plans.
"The Best Third is an invaluable resource for investors and financial advisors alike, allowing them to explore what a new retirement paradigm looks like," said Sharkansky. "We often hear that our retirement years should be about enjoying the fruits of our labor. This new research can help retirees feel more confident with their retirement plans."
Try The Best Third for free at thebestthird.com, and read "The Only Other Spending Rule Article You Will Ever Need," here.
About The Best Third
The Best Third is a free website that leverages research from statistician Stefan Sharkansky, shifting the retirement spending paradigm, and empowering retirees to safely spend more of their wealth while avoiding both premature depletion of their portfolios and unnecessary underspending.
The Best Third provides retirees and financial advisors the ability to explore the updated Annually Recalculated Virtual Annuity (ARVA) approach. This modern framework for withdrawing funds focuses on a combination of a ladder of Treasury Inflation-Protected Securities (TIPS), and a low-cost stock index fund. Users can easily adjust key parameters such as retirement age, portfolio value, income needs, and confidence levels to create personalized, tax-aware income plans. For more information, visit thebestthird.com.
About Stefan Sharkansky, PhD
Stefan Sharkansky is an entrepreneur and the creator and principal of The Best Third. He was a pioneer in direct indexing of stock portfolios for individual investors. He developed the website Personal Fund, which provides cost analysis of mutual funds and ETFs to financial advisors. He previously founded the internet software company Prospero Systems Research, which was acquired by Quarterdeck Corporation. Sharkansky holds a Bachelor of Arts degree in Mathematics from the University of Wisconsin-Madison, a Master of Science in Computer Science from Stanford University, and both a Master of Science and a PhD in Statistics from the University of Washington.
Media Contact
Abbie Sheridan, The Best Third, 1 5162867056, [email protected], www.thebestthird.com
SOURCE The Best Third
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