Drawdown - interested how people manage this month by month...

Albermarle

 but it looks like I've hit a rich vein of opinion/advice! 

The forum can be very useful/informative but you have to be a bit careful.

None of it is 'advice' in the way that is usually referred to in this area. Advice is something personal to you, and can only be given by a registered/qualified financial advisor who knows your circumstances in detail and has gone through all the proper processes ( including being paid of course !) If this advice turns out be bad, you can get legal redress/compensation.

The forum only offers general guidance/information/pointers hopefully in the right direction, and of course many different opinions. Occasionally some rather off the wall ones (usually of the 'we are all doomed variety')  but generally not.

jaypers

I keep a tracker spreadsheet and my plan is to ensure that my overall pot doesn’t erode/decrease. I have savings and if the pension took a hit I would reduce my drawdown accordingly, but still making sure that I take full advantage of my tax free allowance for the year. When things pick up again, revert back. Obviously this is my own personal strategy and everyone is different, but the wrong thing to do is not to keep track. Pension pots and drawdown income needs to be managed very carefully. Drawdown brings with it a lot of freedoms but I feel that many people probably take money out without worrying about potential future consequences. 

redpete

I'm moving rapidly closer to retirement and have taken the difficult decision to engage an IFA on an advice-only basis to advise on: options for moving into draw-down; sequencing draw-down, use of savings, DB benefits and state pensions; and efficient management of LTA.

Waiting on the outcome of that but one early thought is to correct a naïve assumption that a monthly salary would be replaced by monthly draw-down form the pension pot.  A more sensible approach would be to take out from the SIPP quarterly or annually into cash savings and drawing on that for income.  Then probably on an annual basis adjust SIPP investments to maintain an amount (maybe 3 yrs worth) in less volatile assets and leave the balance in growth funds. 

Albermarle

I keep a tracker spreadsheet and my plan is to ensure that my overall pot doesn’t erode/decrease

The usual drawdown %'s  quoted ,take into account some gradual erosion of capital, but not so much that you might run out too quickly. If the markets have a good run, this erosion may not even take place.

Probably if you do not ever let your pot erode, especially of markets are not that favourable, it will mean the potential % drawdown you can achieve could be pretty small, and you will need a lot of cash to support it. 

Trying to keep a  pot 100% intact, for inheritance I presume, is understandable. However you should not lose sight of the main function of a pension pot, which is to pay you a pension.