Have you got a spreadsheet to plan your retirement forecast and income?

Lois_and_CK

Instead of buying an annuity at retirement, I'd like to do income drawdown. So I've had a stab at redoing my retirement spreadsheet to roughly forecast drawdown in retirement.

For the time being, while I'm playing with formulas, I've assumed in retirement: annual 5% growth for my fund, 3% inflation and 2.5% state pension increase.

I'm just looking at my spreadsheet and wondering if I've missed anything obvious though?

In column 1 I have the date of an annual withdrawal for my income.
In column 2 I have the fund total (before any withdrawal) + a formula to add 5% growth each year.
In column 3 I have the annual withdrawal amount + a formula to add 3% each year for inflation.
In column 4 I have a formula that takes away the withdrawal amount in column 3 from the pot total in column 2 to give me the pot balance in column 4 after I've taken out my annual income.

Then when the state pension kicks in at age 67:
I've added a column 5 where I have a formula for the SP + 2.5% annual increase.
And subsequently in column 3 I have a new formula that reduces my pot withdrawal amount by the state pension estimate.

I'm trying to keep it all as simple as possible - and I appreciate it's mostly finger in the air guessing at inflation and growth and so on - but have I missed anything that any of you might have included in your own forecasts/spreadsheets?

AnotherJoe

Look at retireeasy. It does this but with far more bells and whistles. I think its £2 a month now unless the free version lets you do this but IMO worth it as it brings in all sorts of elements you may not have thought of. For example what about ISAs?

Under major categories it has

Desired Income
Capital
Investments
Income Breakdown
Home
Expenses

And within each of those, a set of subject areas such as different types of pension, ages at which different pensions come in, different types of investments such as ISA, cash, other investments, etc. Many many categories. You can also set the order in which you drawdown, for example its more advantageous taxwise to withdraw from ISAs or cash first, and so on.

Lois_and_CK

Thanks. I've had a look at that RetireEasy and it seems really good - thanks for the tip.

I just realised I missed out tax so maybe using an online tool like this is safer!

Silvertabby

The 2.5% State pension triple lock is only guaranteed until 2020.

Mind you, who knows what interest rates will be then. September CPI is usually less than August CPI so, based on August CPI of 0.6%, I guessed that September would be 0.5%. It's just been confirmed as a whole 1% (whoopee!) so we'll see what happens in the next few months.

Mr S has already worked out our pension increases for next April!

westv

MY ss would increase state pension at the same rate as estimated inflation.

Triumph13

You'll find the whole exercise much simpler and the answers much more meaningful if you do it all in today's money rather than having to keep increasing everything by inflation and then needing to strip the inflation back out again to understand what any of the answers mean.
On your assumptions that would mean you worked with 2% investment growth and SP shrinking by 0.5% pa. I use different assumptions, but each to their own on that one.

westv

Triumph13 wrote: »

You'll find the whole exercise much simpler and the answers much more meaningful if you do it all in today's money rather than having to keep increasing everything by inflation and then needing to strip the inflation back out again to understand what any of the answers mean.
On your assumptions that would mean you worked with 2% investment growth and SP shrinking by 0.5% pa. I use different assumptions, but each to their own on that one.

Or, based on the way I would do SP increase, there wouldn't need to be any increases apart from the 2% investment growth.

Lois_and_CK

Thanks everyone for all the tips. That's very useful.

pandora205

Retire Easy does it for you - or at least it worked for me. There was one aspect of my finances that I couldn't work out what to do but a quick email to their support sorted it out.

Lois_and_CK

Thanks Pandora. I'm going to have a play with that this weekend :-)

pandora205

It takes a while to enter everything in, checking figures etc but the results are very useful. You can play with the information, such as retiring at different ages and saving different amounts to see the impact. I think its really useful though my situation is quite simple (having a defined benefit pension and AVCs rather more complex arrangements).