Almost embarrassed to ask...

MazzaMan

This is the best planner I’ve found, takes into account drawing less when your state pension starts
https://www.guiide.co.uk/

SteveBLFC64

Out of interest, does anyone use the CAPE-based method to calculate their withdrawals? I'm still a few years away from retirement, and have been looking at this subject (and the various methodologies available) for some time - this one looks reasonably 'intelligent', in that it's not a fixed percentage, and bases part of it's withdrawal amount on the current and historic market conditions - and it's sufficiently flexible to vary the two figures that make up the withdrawal rate.

I used the calculator available on FI Calc - putting in my projected end pension pot, and playing with the two factors that contribute to the withdrawal rate, I ended up with the base rate as 3.1 and kept the CAEY-based factor at 0.5 - with the current Shiller PE ratio of 29.34 as an example, then that gave a withdrawal rate of 4.8%. I'd then presume at the end of the first year, then you'd make the same calculations based on the Shiller value at that point.

Anyone have any experience of doing anything similar, and able to recommend or discourage from doing so? Or anyone see any pitfalls in following the above? Always better to hear from people that have actually put the theory into practice!

Pat38493

SteveBLFC64 said:

Out of interest, does anyone use the CAPE-based method to calculate their withdrawals? I'm still a few years away from retirement, and have been looking at this subject (and the various methodologies available) for some time - this one looks reasonably 'intelligent', in that it's not a fixed percentage, and bases part of it's withdrawal amount on the current and historic market conditions - and it's sufficiently flexible to vary the two figures that make up the withdrawal rate.

I used the calculator available on FI Calc - putting in my projected end pension pot, and playing with the two factors that contribute to the withdrawal rate, I ended up with the base rate as 3.1 and kept the CAEY-based factor at 0.5 - with the current Shiller PE ratio of 29.34 as an example, then that gave a withdrawal rate of 4.8%. I'd then presume at the end of the first year, then you'd make the same calculations based on the Shiller value at that point.

Anyone have any experience of doing anything similar, and able to recommend or discourage from doing so? Or anyone see any pitfalls in following the above? Always better to hear from people that have actually put the theory into practice!

I have read some information about it on a couple of blogs and there is a spreadsheet on the "Early Retirement Now" website that has a tab for CAPE based withdrawals.  

It was suggesting to me first year withdrawals quite a lot higher than most other tools I've experimented with - therefore my conclusion was that if you use this method, you need to be prepared to reduce your withdrawals significantly if times get bad (but not as much as if you were doing  a pure % of remaining fund method).

There is also the VPW method advocated on the bogleheads forums I had a play with - it's not exactly CAPE based but it's a similar idea with variable but smoothed withdrawals.

joebob

Great post some very helpful and interesting suggestions and information given  100% positive replies  0% negative  how it should be.

Albermarle

joebob said:

Great post some very helpful and interesting suggestions and information given  100% positive replies  0% negative  how it should be.

And it did not even go Off Topic either