A retirement check-in, year by year: a couple who retired in 2021

The short version

Pat and Sam retired in January 2021 with $1,500,000 and $42,000 a year of Social Security. Over the next five years they lived through a 28% stock gain, a year when stocks and bonds fell about 18%, and 7% inflation. Following their rules, they never had to cut spending, never sold investments after the crash, and by January 2026 had about $2M saved after spending about $539k.

Pat and Sam are fictional. Their markets are not: every return and inflation figure is the actual U.S. number for that year, and every decision comes from the same check-in engine Century Tested Live uses.

Their starting point and rules

These are Century Tested Live’s suggested starting rules. Anyone can set different ones.

Six January check-ins

1. January 2021Age 67Hold

   Their first check-in: rules set, retirement begins.

   They start at $100,000 a year: $42,000 from Social Security and $58,000 (3.9% of savings) from savings.

   Their cash bucket already holds 4.0 years of withdrawals.

2. January 2022Age 68Hold

   2021: stocks +28.5%, bonds −4.4%, inflation 7.0%

   Inflation was 7.0%, above their 4% cap, so their raise is held to 4%, to $104,000. Savings of $1.72M sit between the cut level ($1.3M) and the raise level ($1.95M), so no guardrail is triggered: spending for the year is $104,000.

   Investments are near their high, so $67,210 moves from investments to cash, back to 4.0 years of withdrawals.

3. January 2023Age 69Hold

   2022: stocks −18.0%, bonds −17.8%, inflation 6.5%

   Inflation was 6.5%, above their 4% cap, so their raise is held to 4%, to $108,160. Savings of $1.4M sit between the cut level ($1.35M) and the raise level ($2.03M), so no guardrail is triggered: spending for the year is $108,160.

   Investments are still well below their high, so nothing is sold. This year’s withdrawal comes from cash, which still covers 2.9 years.

4. January 2024Age 70Hold

   2023: stocks +26.1%, bonds +3.9%, inflation 3.4%

   Inflation was 3.4%, and spending rises with it, to $111,783. Savings of $1.6M sit between the cut level ($1.4M) and the raise level ($2.1M), so no guardrail is triggered: spending for the year is $111,783.

   Investments are near their high, so $130,886 moves from investments to cash, back to 4.0 years of withdrawals.

5. January 2025Age 71Hold

   2024: stocks +24.9%, bonds −1.6%, inflation 2.9%

   Inflation was 2.9%, and spending rises with it, to $115,014. Savings of $1.81M sit between the cut level ($1.44M) and the raise level ($2.16M), so no guardrail is triggered: spending for the year is $115,014.

   Investments are near their high, so $62,254 moves from investments to cash, back to 4.0 years of withdrawals.

6. January 2026Age 72Hold

   2025: stocks +17.7%, bonds +7.8%, inflation 2.7%

   Inflation was 2.7%, and spending rises with it, to $118,165. Savings of $2M sit between the cut level ($1.48M) and the raise level ($2.22M), so no guardrail is triggered: spending for the year is $118,165.

   Investments are near their high, so $65,594 moves from investments to cash, back to 4.0 years of withdrawals.

What their rules did

• The cash bucket did its job in the crash. In January 2023, after stocks and bonds both fell, the rules sold nothing. Pat and Sam spent from cash and refilled it a year later, after stocks recovered.
• They came close to a cut. Savings in January 2023 were only about 3% above their cut level. The strong 2021 gave them that cushion.
• The inflation cap mattered. Inflation ran 7.0% and 6.5% in 2021 and 2022; their raises were held to 4% each year, which slowed spending growth while savings were down.
• No raises yet. Savings grew to $2M, but spending rose too, so they stayed below the raise level.

What if they had retired a year later?

Same couple, same savings, same rules, but retiring in January 2022, right before stocks and bonds both fell. In January 2023 their savings were $1.22M, below the cut level of $1.3M, so the rules cut spending 10%, from $104,000 to $93,600. After that, inflation raises resumed, and by January 2026 spending was $102,258, close to where it was before the cut, with $1.76M saved.

One year’s difference in start date meant a single 10% cut, worked back up by inflation raises over the next three years. That is what guardrails are for: a modest, planned adjustment instead of guessing whether to panic. See how bad starts played out over longer periods for people who retired in 2000 and 2008.

The full record

Each January check-in uses the savings and cash balances on that date. Spending for the year comes out of the cash bucket; investments earn the actual S&P 500 and 10-year Treasury returns for that year, and cash earns the 3-month Treasury bill rate. Social Security is assumed to rise with the same capped inflation. Taxes and fees are not included. The data is our historical returns series. 2025 is the last full year of data, so January 2026 is the latest check-in.

Run your own check-in

Century Tested Live turns your own rules into the same January check-in: enter a few numbers from your statements and see what your plan calls for, and why. Set up your rules in Live mode.