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Drawdown: safe withdrawal rates

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  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Reserved for future use 4.
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Reserved for future use 5.
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Reserved for future use 6. Probably not enough since I already have many potential candidates but it's start and I'll stop at 6. :)
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    10,000 Posts Fifth Anniversary Name Dropper Photogenic
    jamesd wrote: »

    maybe I'm an outlier but I dont think I am, in my circumstances that makes no sense to me unless its including items like mortgages, helping kids at university and so on, which the plan should be, to have cleared by retirement. Well that was my plan and it worked anyway :D

    If i think about spending from the POV of say the five years before retirement to the 5 years after (and probably up to ten), spending ought to increase as you have more time and opportunity to spend money. Its only as odds of being ill/infirm increase that you might then spend less.

    When I retire next year I could take cruises, fly and stay in hotels every night of the next year, I couldn't do that this year since my boss might notice my absence.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    AnotherJoe wrote: »
    When I retire next year I could take cruises, fly and stay in hotels every night of the next year, I couldn't do that this year since my boss might notice my absence.

    One notion you'll see discussed is that lots of spending while you're working is a superficial "cheer me up" exercise to compensate for being fed up at work. Once you are retired you'll be an altogether happier bunny, and learn that the best things in life are free, thus finding no need to be extravagant.


    Like most pop psychology it's probably roughly true for some people and quite untrue for others.
    Free the dunston one next time too.
  • greenglide
    greenglide Posts: 3,301 Forumite
    Part of the Furniture Combo Breaker Hung up my suit!
    ... and there are people on this forum who expect to spend less in retirement than before because of savings through not buying frothy coffee at work, not buying lunches at work, not spending on "work clothes", saving on commute etc.

    Doesnt work if you dont buy frothy coffee, wear "relaxed" clothes for work, bring sandwiches from home, live reasonably close to work etc (as I do).
  • green_man
    green_man Posts: 548 Forumite
    Tenth Anniversary 500 Posts Name Dropper
    Great work James and many thanx, I will work through this gradually.

    I have recently retired at 50 and my required withdrawal rate (ignoring state pension) is just under 3%. Though at the moment I have about 30% in cash, I should be fine based on any of the methods I have read about, I am currently trying to establish a high income ISA portfolio to supplement my pension drawdown which I will start in 5 years.
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 10 June 2016 at 1:42AM
    Do be sure to use your income tax personal allowance and also consider some use of VCTs, perhaps to eliminate income tax on your whole basic rate income, allowing faster move from pension to ISA. Not sure why you'd delay drawing on taxable pension money unless you know you can never have an income tax bill for it.

    While nothing is certain, betting on higher taxes and getting protection from them does seem like sensible planning. :)
  • N1AK
    N1AK Posts: 2,903 Forumite
    Part of the Furniture 1,000 Posts
    AnotherJoe wrote: »
    maybe I'm an outlier but I dont think I am, in my circumstances that makes no sense to me unless its including items like mortgages, helping kids at university and so on, which the plan should be, to have cleared by retirement. Well that was my plan and it worked anyway :D

    I think part of the disconnect might be the comparison of yourself as an individual to a massive diverse population of data. The most obvious difference to me is that people who are saving effectively for retirement are likely to be controlling spending more than people who aren't; they are also likely to have the resources to increase spending in retirement when those who didn't save as much need to cut it back.
    Having a signature removed for mentioning the removal of a previous signature. Blackwhite bellyfeel double plus good...
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I've just added an "at a minimum, do these things" part to the first post to point people to the first things that they should be learning about.
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