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What's your drawdown percentage and how much of that do you spend on financial fees?

bostonerimus
bostonerimus Posts: 5,617 Forumite
Sixth Anniversary 1,000 Posts Name Dropper
Coming out of the recent thread on "4% foolishness", I thought it would be interesting to ask how much people in drawdown are taking out each year and how much of that do they spend on financial fees ie IFA, platform and fund charges etc. If you have other income you could mention that and also give a rough idea of your age. I'll start.

Age, late 50s
Retired for 6 years
Income from DB and rental is enough for me to live on
Drawdown is 0%
Financial fees ~0.1% (no IFA , no platform fees, just fund fees)

“So we beat on, boats against the current, borne back ceaselessly into the past.”
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Comments

  • pip895
    pip895 Posts: 1,178 Forumite
    Tenth Anniversary 1,000 Posts Combo Breaker
    edited 2 September 2021 at 10:40PM
    Age late 50s
    Retired 10 years
    Income rental & drawdown just commenced at 4.3% 
    Financial fees - platform ~0.1% funds 50% active average ~0.3%

    Current plan is that drawdown will reduce to ~3% on SP kicking in and stop from age 75 to be toped up and replaced by ISAs  all subject to change when the rules [or conditions] change..
     
  • pip895 said:
    Age late 50s
    Retired 10 years
    Income rental & drawdown just commenced at 4.3% 
    Financial fees - platform ~0.1% funds 50% active average ~0.3%

    Current plan is that drawdown will reduce to ~3% on SP kicking in and stop from age 75 to be toped up and replaced by ISAs  all subject to change when the rules change..
     
    Sounds like a tenable, well considered plan. Looks like about 10% of your drawdown is going to financial fees. It will be interesting to see the range of that percentage.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • dunstonh
    dunstonh Posts: 120,164 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Coming out of the recent thread on "4% foolishness", I thought it would be interesting to ask how much people in drawdown are taking out each year and how much of that do they spend on financial fees ie IFA, platform and fund charges etc. If you have other income you could mention that and also give a rough idea of your age. I'll start.

    Age, late 50s
    Retired for 6 years
    Income from DB and rental is enough for me to live on
    Drawdown is 0%
    Financial fees ~0.1% (no IFA , no platform fees, just fund fees)

    Although you are based in the US and how your fees are measured will be different to the UK.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • pip895
    pip895 Posts: 1,178 Forumite
    Tenth Anniversary 1,000 Posts Combo Breaker
    edited 2 September 2021 at 10:41PM
    pip895 said:
    Age late 50s
    Retired 10 years
    Income rental & drawdown just commenced at 4.3% 
    Financial fees - platform ~0.1% funds 50% active average ~0.3%

    Current plan is that drawdown will reduce to ~3% on SP kicking in and stop from age 75 to be toped up and replaced by ISAs  all subject to change when the rules change..
     
    Sounds like a tenable, well considered plan. Looks like about 10% of your drawdown is going to financial fees. It will be interesting to see the range of that percentage.
    I don't really see the point of stating the fees as a % of the drawdown I happen to be withdrawing - after all on that basis your fees would be enormous - infinite in fact.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper
    edited 2 September 2021 at 10:42PM
    dunstonh said:
    Coming out of the recent thread on "4% foolishness", I thought it would be interesting to ask how much people in drawdown are taking out each year and how much of that do they spend on financial fees ie IFA, platform and fund charges etc. If you have other income you could mention that and also give a rough idea of your age. I'll start.

    Age, late 50s
    Retired for 6 years
    Income from DB and rental is enough for me to live on
    Drawdown is 0%
    Financial fees ~0.1% (no IFA , no platform fees, just fund fees)

    Although you are based in the US and how your fees are measured will be different to the UK.
    Yes I am in the US, my fees are what gets deducted from my accounts every quarter and as I own Vanguard funds on the US Vanguard platform there are no platform fees. That in no way changes the goal of this thread and it will still be interesting for UK retirees to share their withdrawal rates and the amount that they spent on financial fees. It might be enlightening.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • michaels
    michaels Posts: 29,219 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 2 September 2021 at 11:33PM
    Early 50s, -1 years retired (?) Fees 0.15 % of portfolio
    Drawdown will be of order 4.25% based on 'SWR' of 3-3.25% plus 1% uplift to account for 2 x full state pensions due eventually.

    One issue is that with a smaller income there are less luxuries to be cut following a poor sequence of returns.
    I think....
  • Prism
    Prism Posts: 3,852 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    I am not retired quite yet but will be in a few years. Platform fees are 0.02% and fund fees around 0.75%/
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    1,000 Posts Third Anniversary Name Dropper
    edited 2 September 2021 at 11:05PM
    Age, early 50s. Wife and me. Canada.
    Will retire when I stop enjoying work. The wife has largely retired but brings in $30K.
    $10k income from the farm (could go up if I had more time)

    Quite a bit of DB/state pension income but its a while before it gets going. 

    Don’t know what’s “enough to live on” but we won’t starve. 

    Financial fees ~0.1% (no IFA , platform fees only on my UK SIPP of 100 quid per annum, ETF MER fees, small commissions (only on UK SIPP).

    Some but not all of my investments are subject to taxation: withholding taxes on dividends in various countries, capital gains, interest and dividend taxes in non-registered accounts. Adds another 0.2% cost to the overall portfolio. 

    I estimate net worth as both “gross” of future taxes and “net”.  Depending on the wrapper, the net version accounts for assumed future taxation impacts (0%, 10% or 30%). 
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    According to my broker my total costs across my GIA, ISA and SIPP amounted to 1.72% for the year ended 31st March 2021.  
  • Late 50’s     Reduced hours from 3000/yr to 150/yr, so let’s say retired.

    SIPP + ISA:   A mixture of active and passive.  Charges 0.33% + £240 + some trades.  So about 0.4%.  YTD XIRR 25.6%

    Property investment in USA.  Charges close to 5% but that’s a performance fee, so it’s a good thing. XIRR last 10 yrs:  26.0% after fees

    Too much cash, earning 0.55%. + Premium Bonds.

    1 Buy-to-let: annual return after costs 7%;     1 fast car: annual return -5%, charges ~2k

    Based on my health and energy levels last 10 yrs, I see my health doing this:


    So I plan my withdrawal rate to look like this:


    Spend it while you are active enough to enjoy it! Before I get flamed to oblivion, I have a full SP, and a modest DB which, together, will give me an index linked 20k (in today’s money) at 67. I can live on 20k if I have to, so I will never go hungry if the portfolio turns south. 

    There will be some CGT when I sell the BTL, and income tax on the pensions. Some tax each side of the Pond on the American fund. All in all not too unhappy at the amount of tax I am facing. Should be in the 5-10% range over the rest of my lifetime.

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