Explaining the Retirement Paycheck and Guardrails
These two short videos explain the core concepts that shape how Income Lab turns a portfolio into reliable, adjustable income.
Last published on: August 13, 2026
These two videos explain the core concepts that shape how Income Lab turns a portfolio into reliable, adjustable income.
Before you build your first plan, it helps to understand the two ideas everything else rests on. In these videos you will learn what a Retirement Paycheck is and why planning around the income a client actually draws is clearer than planning around a portfolio balance.
Then you will learn how guardrails keep that paycheck on track by signaling when it is safe to spend a little more and when it makes sense to ease back. You will also see why guardrails adapt as markets and the plan change rather than staying fixed, so a client always knows where they stand.
Explaining Retirement Paycheck
Transcript: Explaining Retirement Paycheck
Income Lab's guardrails tell clients when to make an adjustment. But adjustments only make sense when someone is clearly overspending, living beyond their means, or clearly underspending, living far, far below them. If neither of those is true, no changes are needed.
The upper guardrail tells the clients they're spending well below their means. It tells them that they're at a high risk of regret. The default upper guardrail in Income Lab is the portfolio balance that would give the client a 100% chance of underspending and regret if they continue with their current retirement paycheck.
The lower guardrail is the balance that, if they had it today, would put them right in the middle of the overspending zone, with a 75% chance that they're spending too much, spending above their means. At that point, there's a very good chance that they're overtaxing their resources, and it's time to tap the brakes a bit.
But Income Lab goes beyond calculating these guardrails and estimates the adjustment the client would make if they did hit the guardrail to bring their spending back on track.
If they hit the upper guardrail, we tell you what increase in spending would decrease that risk of regret, but also not take risk too high.
For the adjustment after hitting the lower guardrail, we calculate a reasonable, often fairly small adjustment that has a good chance of putting them back on track, but is also not so large and painful that it could be an overreaction.
We found that clients would typically prefer to make a few adjustments in bad times than to make huge unnecessary cuts in spending and then have to reverse those during market recoveries.
Guardrails give an advisor a clear answer to the questions so many clients ask: How are we doing? And should we make any changes?
Guardrails set clear expectations about when a change might be worthwhile and what an adjustment might look like. That makes it so much easier to manage retirement paychecks and client emotions.
Explaining Guardrails
Transcript: Explaining Guardrails
In order to figure out how much someone can spend in retirement, Income Lab looks at all of their resources. And then it considers all the ways that the future could work: good returns, bad returns, high inflation, low inflation.
It even looks at differences in longevity and builds a cloud of possible futures—more than a thousand scenarios.
From that cloud, Income Lab finds a spending level that is within your client's means. We want to live within our means, but also live the best life we can.
After we know how much someone can spend, the next question is: What would make changing that a good idea?
Those are the guardrails.
Guardrails give an advisor a clear answer to the questions so many clients ask: How are we doing? And should we make any changes?
Guardrails set clear expectations about when a change might be worthwhile and what an adjustment might look like.
That makes it so much easier to manage retirement paychecks and client emotions.