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    How does a 12 quarter spending policy work in a fund with less than 12 quarters available?
    • 30 Jan 2023
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    How does a 12 quarter spending policy work in a fund with less than 12 quarters available?

    • Updated on 30 Jan 2023
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    Article summary

    Many funds have over the 12 quarters we use in our spending policy calculation.  Obviously a new fund will only have a few quarters.  Does the calculation always divide by 12 to get the average?

    Answer:
    No, the spending policy calculation will divide by the actual quarters with balances.  So in a calendar year foundation, if the first quarter with a balance was the second quarter and you base your calculation on the last quarter working backwards, the calculation would include balances from quarter 2,3, and 4 and would divide by 3 to get the average.
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