Are portfolio returns on track for a real increase in your Safe Spending Amount for next year?
Posted on August 22, 2025

You are (roughly) on track to calculate to a real increase in your Safe Spending Amount (SSA, see Chapter 2, Nest Egg Care [NEC]) for your spending in 2026. I assume your portfolio is similar to ours and that you use November 30 as your calculation date. The portfolio return for Patti and me as of mid-August was 7.2%. (We’re down a bit from that as I write this.)

 

That 7.2% real return rate meant that all of us had earned back more in real spending power than we withdrew last December for our spending in 2025. If returns hold, we will have more real portfolio value this coming November 30 than we had last November 30. When we have more than the year before, we always will calculate to a greater SSA.

 

The 7.2% real return translates to about 1% real increase in our SSA. I think your calculation would give you a greater increase.

 

Details:

 

== We withdrew 5.50% last December 1 ==

 

Last December, Patti and I (and you, too) calculated to a real increase in our SSA based on the 12-month portfolio returns ending November 30: ours was a 3% real increase. The 22% real return that year added to the +8% real return of 2023 to overcome that steep -18% real decline in 2022. We then used our 5.50% age-appropriate Safe Spending Rate (SSR%, Chapter 2 NEC) to calculate our SSA. See post here; here is our detailed, historical calculation sheet from that post.

 

== ~7.2% real return so far ==

 

I use this spreadsheet that you can download to track our 12-month returns starting each December 1. We are up 7.2% as of mid-August. International stocks lead the pack (for once!). Your real return should be ~7.2%.

 

 

== Our upcoming SSA calculation ==

 

On December 1, I will test the same Safe Spending Rate (SSR%, Chapter 2 NEC) as last year – 5.50%. This is a year when the SSR% that we will test does not change. The spreadsheet shows we would calculate to about 1% real increase for our spending in 2026. If returns hold, this will be the seventh increase in our SSA in the last 11 years: we’re up 50% in real spending power.

 

 

Why does our SSR% not change this year? It’s all about the rounding of life expectancy to whole years. I round Patti’s life expectancy to whole years. That is the number of years I use to get our age appropriate SSR%.

 

This table shows the past history of our SSR% that we tested every November 30 and projects it for the next several years. The highlight in gold shows that our SSR% this year rounds to the same number of whole years as last November.

 

 

When we started our plan, the rounding of life expectancy years meant three years of change and one year staying the same.. Now that we’re older, life expenctancy changes for two years and remains the same in the third year.

 

I’ll check the Social Security Life Expectancy calculator in November to see if the life expectancies remain the same; the actuarial tables that underlie the calculator are updated ~annually.

 

==Your SSA for 2026: likely better =

 

Your calculation likely gives you more than ~1% increase from the year-to-date 7.2% real return.

 

1. If you are younger, your SSR% was lower last November 30. The 7.2% return means you earned back more relative to the amount you withdrew.

 

2. You likely gain from an increase in your SSR% for your calculation this year.

 

As our SSR% increases, we need less portfolio value to calculate to the same SSA (Chapter 9, NEC). As an example, if the SSR% for Patti and me to test this upcoming December 1 was 5.80% (the one we will test in December 2026), we wouldn’t need to earn back all that we withdrew for our spending to calculate to a real increase in our SSA. The percentage increase in SSR% is high for us – nearly 5.5% ([5.8%-5.5%]/5.5%); we’d need less than 0.4% real increase in our portfolio to calculate to a real increase in SSA. A 7.2% increase in our portfolio would translate to nearly 7% real increase in our SSA.

 

 

 

Conclusion: This post contains a spreadsheet you can download that tracks the real return on your portfolio and calculates how much real portfolio gain you must have in 2025 to calculate to a real increase in your SSA.

 

As of mid-August, all of us who follow the investing recommendations in Nest Egg Care were on track for an real increase in our Safe Spending Amount for our spending in 2026. This is good news, but a lot can change over the next several months. I’ll be tracking where Patti and I stand at least monthly.