Some clients come in with regularly updated, detailed balance sheets. When the numbers drop, they feel bad. When they rise, they feel good. While their financial security did not change, their perception of it did.

When we run retirement-planning models for clients we use thousands of iterations, some drawing on markets that none of us has experienced and use a spending rate that can survive these gyrations. Yet when clients feel poor, they tend to spend less — regardless of the permission the models give them.

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