Can i afford to retire (if pushed)

Albermarle

Robwales said:

oh and to clarify - in the above model i have assumed my income requirement reduces over the years in 3 steps:  the first 21 years are £50k + inflation, and then after that (in blue) for 10 years it reduces by 25%,and the remaining years reduces by 25% again...logic being my expenditure will diminish when (if) if get to these kinda ages.

This reduction in spending is not a given.
As you and/or your partner get older , there can be extra costs for having to say employ more people for jobs you now do yourself. Gardening, decorating etc 
Also you may want to pay for private medicine.
Maybe have to make big home alterations to cope with infirmity and of course potential care costs.
Not fun things but for sure can make your old age a bit nicer.

Although I fully respect your desire to plan out expenditure  for the next 40 years, and of course the usual excellent detailed input from other forum members . I think at the end of the day with £1.7 Million , I am pretty sure  you are going to be absolutely fine , even if you never look at a spreadsheet again   

michaels

cfw1994 said:

michaels said:

Robwales said:

Thanks cfw1994 for his xls - really useful to model a few drawdown scenarios over a 45 yr period (i will be 95)  - factoring in inflation (i have assumed 2.5% in latest model - and applied the same to the state pension) and pot growth (assumed 3.5%) and 3 crashes over 45 yrs (minus 25% that year) - certainly enlightening!    Does these figures feel about right as a first approximation??

Sorry to bank on about this but running a few scenarios in a spreadsheet is not stress testing your portfolio - at the very least run it against the last 100 years historical actuals and ideally also 10k random monte carlo simulations based on real world variance in asset prices and inflation.

Banking on it?  I’m guessing you mean banging on about it!

Of course one simple spreadsheet won’t ‘test’ a huge amount…..but it can help.  
Other sheets are available….whatapalaver made a cool one, see https://forums.moneysavingexpert.com/discussion/6229495/spreadsheet-to-monitor-pensions/p2

For testing 100 years, etc, you would use a cfiresim or similar.  

My point with my comment about nobody having crystal balls to figure out what is reasonable inflation or growth over the years ahead was just that: nobody can predict everything with any hope of accuracy. 

Most important to me is that you have a plan (failure to plan is planning to fail, etc!).  If a simple spreadsheet helps that (fwiw, I think it does), then you are on the way 👍

Beyond that: be flexible!  

If markets and monies take a tumble, particularly in the early years, be frugal, or maybe take a part time job.  
If you are unable to manage that, you can of course work more years for a bigger buffer.

Life isn’t a rehearsal….

BTW, great replies from @jamesd above 😎👍

Correct, Bang on not Bank on.

I guess running one or more scenarios with inflation blips and market dips is better than simply putting together a spreadsheet with market growth of 7% pa and inflation at 2.5% (historic averages) but imho it does not add real value as it may make users think they have tested against a reasonable bad scenario and all is fine whereas actual historic bad scenarios may be very different from the modelled one.  Hence as there are tools that will run a portfolio and future cash flows against all historic scenario why not use them rather than one random test? 

And even then you are only comparing against what ha happened not what might happen hence the value in running multiple simulations (and even then the parameters are based on what actually happened so by definition won't cover 'black swan' events where the future can not be extrapolated from applying a reasonable likelihood function to what happened in the past.