The 1/N strategy is a straightforward rule that determines your yearly withdrawal with the equation:

withdrawal=1portfolioValuewithdrawal = \frac{\displaystyle 1}{\displaystyle portfolioValue}

For example, if you estimate a 30 year retirement and start with $1,000,000, then your first year withdrawal will be $1,000,000 / 30, or $33,333.33.

Later on, if we assume that you have $250,000 in your portfolio with 2 years remaining, then your annual withdrawal would be $250,000 / 2, or $125,000.


  • Ensures that you spend every available dollar
  • Never prematurely runs out of money


  • Tends to spend more money toward the end of your retirement than at the beginning.