In this conversation, Wade discusses the essential financial goals of retirement, encapsulated in the concept of the four L’s: longevity, lifestyle, legacy, and liquidity. He emphasizes the importance of assessing financial preparedness through the funded ratio, which compares assets to liabilities. The discussion also covers safe withdrawal rates, suggesting a rate of 4.5% based on the funded ratio approach. Finally, Wade highlights the significance of implementing variable spending strategies to enhance retirement enjoyment and financial security. Takeaways The four L’s of retirement are longevity, lifestyle, legacy, and liquidity. Longevity refers to essential expenses that must be covered regardless of lifespan. Lifestyle expenses are discretionary and enhance quality of life in retirement. Legacy goals involve what one wishes to leave for the next generation. Liquidity is crucial for managing unexpected expenses in retirement. The funded ratio helps assess financial preparedness for retirement. A funded ratio of 100% or higher indicates being on track for retirement. The safe withdrawal rate based on the funded ratio is 4.5%. Variable spending strategies can allow for higher initial withdrawal rates. The funded ratio approach provides more confidence in spending during retirement. Chapters 00:00 The Four L’s of Retirement Goals 06:57 Assessing Financial Preparedness for Retirement 16:27 Understanding Monte Carlo Simulations in Retirement Planning 19:52 The Safe Withdrawal Rate: A Critical Discussion 24:02 Variable Spending Strategies in Retirement 28:05 The Impact of Taxes and Time Horizon on Withdrawal Rates Links 📘 New Release: The Retirement Planning Guidebook (3rd Edition) Wade Pfau’s must-read Retirement Planning Guidebook just got even better. The 3rd Edition is now available and packed with the latest updates to help you design your retirement strategy with confidence. Grab your copy on Amazon or your favorite book retailer: https://books2read.com/Retirement 📅 Upcoming Webinar: Tax Planning for Retirement in 2026 Join Wade Pfau live for a free Retirement Researcher webinar on Wednesday, January 28 at 1PM ET. He’ll walk through what proactive tax planning should look like before the 2026 tax changes kick in. Reserve your spot now at retirewithstyle.com/podcast Explore the New RetireWithStyle.com! We’ve launched a brand-new home for the podcast! Visit RetireWithStyle.com to catch up on all our latest episodes, explore topics by category, and send us your questions or ideas for future episodes. If there’s something you’ve been wondering about retirement, we want to hear it! This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”