Dynamic spending rules for retirement drawdown pros/cons and alternatives?

LHW99

FIREDreamer said:

Albermarle said:u

FIREDreamer said:

Sea_Shell said:

So easy to get caught up in analysis paralysis.

If the numbers "feel" right and appear to make sense, go for it 😎

That's what we did.   Plan's holding up so far, after 4 years 🤞

Just read your nuts thread. Not all of it obviously as it is quite a long thread.

I have a lot more than you (not boasting), probably double, I am older, can probably retire but too frightened or unsure / worried to do so.

If I bought an annuity it would be enough (and a bit more) but I just can’t give that much money to an insurer.

i will be one more year until I’m 80 at this rate, how do I get myself out of this.

I am sure my health would improve if I could get the courage to retire. Financial services, not customer facing, more like programming, compressed hours, not physically demanding, finding the job stressful and I find myself dreading every day.

Help!

You are not alone in this . See the posts from @southcoastboy.

It is more of an anxiety issue than about money.

You might benefit from reading this thread, where the poster actually retired with less than SeaShell, I think.
A Paupers Pension Tale (Not many nuts to dig up) — MoneySavingExpert Forum

Wow, I am rich in comparison to that but still finding it difficult to press the button. Sigh.

Could you reduce to part time, so you get used to working less and using your pot more before you finally go?

GazzaBloom

When I see discussions on SWRs they seem to be calculated as fixed over the length of retirement not taking into account additional income such as SPs or other pensions that may start later in retirement, mine will vary as it will start higher for 8 years then drop once when my SP kicks in and then again 3 years later when wife's SP kicks in. 

So, over say a 40 year retirement, it may starts at 5% of opening portfolio then drop to 3 % after 8 years then down to 1% after 11 years for the rest of retirement, averaging around 2% across the whole retirement.

Heisenberg01

10 year fixed term annuity until state pension age, using a third of pot. That is if rates are as good as now in 2/3 years.

FIREDreamer

LHW99 said:

FIREDreamer said:

Albermarle said:u

FIREDreamer said:

Sea_Shell said:

So easy to get caught up in analysis paralysis.

If the numbers "feel" right and appear to make sense, go for it 😎

That's what we did.   Plan's holding up so far, after 4 years 🤞

Just read your nuts thread. Not all of it obviously as it is quite a long thread.

I have a lot more than you (not boasting), probably double, I am older, can probably retire but too frightened or unsure / worried to do so.

If I bought an annuity it would be enough (and a bit more) but I just can’t give that much money to an insurer.

i will be one more year until I’m 80 at this rate, how do I get myself out of this.

I am sure my health would improve if I could get the courage to retire. Financial services, not customer facing, more like programming, compressed hours, not physically demanding, finding the job stressful and I find myself dreading every day.

Help!

You are not alone in this . See the posts from @southcoastboy.

It is more of an anxiety issue than about money.

You might benefit from reading this thread, where the poster actually retired with less than SeaShell, I think.
A Paupers Pension Tale (Not many nuts to dig up) — MoneySavingExpert Forum

Wow, I am rich in comparison to that but still finding it difficult to press the button. Sigh.

Could you reduce to part time, so you get used to working less and using your pot more before you finally go?

Been part time on a 3 day week for 4 years! 

Still salary sacrificing into a pension.

Two small DB pensions taken early as worried about LTA so feel stupid about that now. Feel even stupider about paying LTA tax on a DC crystallisation in case LTA tax went up. Should have left uncrystallised in retrospect.

The LTA tax I paid (or the SIPP paid really) was effectively 2 years of intended drawdown so I feel annoyed with myself. However I am not able to see into the future.

Will never get that back but adding more in my pension to save more NI to get something back as pension income is NI exempt.

Cannot just retire, need to retire to something, trying to work out what something actually is.

Not wishing to vegetate in front of the television like Jim Royle.

EDIT: If I used 66% of my crystallised pot to buy a JL 50% RPI annuity with a 20 year guarantee I would definitely be OK. A big pot to hand over though (difficult to do) but it could enable a full retirement stress free (my State pension fully paid up two tax years ago). This is just a first world problem which I cannot solve.

Sea_Shell

FIREDreamer said:

Sea_Shell said:

So easy to get caught up in analysis paralysis.

If the numbers "feel" right and appear to make sense, go for it 😎

That's what we did.   Plan's holding up so far, after 4 years 🤞

Just read your nuts thread. Not all of it obviously as it is quite a long thread.

I have a lot more than you (not boasting), probably double, I am older, can probably retire but too frightened or unsure / worried to do so.

If I bought an annuity it would be enough (and a bit more) but I just can’t give that much money to an insurer.

i will be one more year until I’m 80 at this rate, how do I get myself out of this.

I am sure my health would improve if I could get the courage to retire. Financial services, not customer facing, more like programming, compressed hours, not physically demanding, finding the job stressful and I find myself dreading every day.

Help!

@FIREDreamer

I'd suggest doing a thread and posting up your numbers, and get the 'wisdom' of the pensions board.   

Reading between the lines, you are late 50s (plus) and have a pot pushing £1m.   (Married, family etc?)

It sounds like it's more of an emotional hurdle than a financial one.    You sound like you need that extra push to make the leap.    Come on in, the water's lovely.

It sounds like there are more 'pros' than 'cons' in your "should I retire?" benefit analysis.

FIREDreamer

Sea_Shell said:

FIREDreamer said:

Sea_Shell said:

So easy to get caught up in analysis paralysis.

If the numbers "feel" right and appear to make sense, go for it 😎

That's what we did.   Plan's holding up so far, after 4 years 🤞

Just read your nuts thread. Not all of it obviously as it is quite a long thread.

I have a lot more than you (not boasting), probably double, I am older, can probably retire but too frightened or unsure / worried to do so.

If I bought an annuity it would be enough (and a bit more) but I just can’t give that much money to an insurer.

i will be one more year until I’m 80 at this rate, how do I get myself out of this.

I am sure my health would improve if I could get the courage to retire. Financial services, not customer facing, more like programming, compressed hours, not physically demanding, finding the job stressful and I find myself dreading every day.

Help!

@FIREDreamer

I'd suggest doing a thread and posting up your numbers, and get the 'wisdom' of the pensions board.   

Reading between the lines, you are late 50s (plus) and have a pot pushing £1m.   (Married, family etc?)

It sounds like it's more of an emotional hurdle than a financial one.    You sound like you need that extra push to make the leap.    Come on in, the water's lovely.

It sounds like there are more 'pros' than 'cons' in your "should I retire?" benefit analysis.

OK, will do, try to put something together, but with the numbers people might think I am suffering from first world problems.

Sea_Shell

FIREDreamer said:

Sea_Shell said:

FIREDreamer said:

Sea_Shell said:

So easy to get caught up in analysis paralysis.

If the numbers "feel" right and appear to make sense, go for it 😎

That's what we did.   Plan's holding up so far, after 4 years 🤞

Just read your nuts thread. Not all of it obviously as it is quite a long thread.

I have a lot more than you (not boasting), probably double, I am older, can probably retire but too frightened or unsure / worried to do so.

If I bought an annuity it would be enough (and a bit more) but I just can’t give that much money to an insurer.

i will be one more year until I’m 80 at this rate, how do I get myself out of this.

I am sure my health would improve if I could get the courage to retire. Financial services, not customer facing, more like programming, compressed hours, not physically demanding, finding the job stressful and I find myself dreading every day.

Help!

@FIREDreamer

I'd suggest doing a thread and posting up your numbers, and get the 'wisdom' of the pensions board.   

Reading between the lines, you are late 50s (plus) and have a pot pushing £1m.   (Married, family etc?)

It sounds like it's more of an emotional hurdle than a financial one.    You sound like you need that extra push to make the leap.    Come on in, the water's lovely.

It sounds like there are more 'pros' than 'cons' in your "should I retire?" benefit analysis.

OK, will do, try to put something together, but with the numbers people might think I am suffering from first world problems.

These pension boards are full to the rafters of those of us with 'first world problems'

It IS hard to change saving habits and start 'de-accumulating', but if you're in a job that is giving you stress, then carrying on, when you don't have to, seems counter-productive.

RogerPensionGuy

FIREDreamer said:

LHW99 said:

FIREDreamer said:

Albermarle said:u

FIREDreamer said:

Sea_Shell said:

So easy to get caught up in analysis paralysis.

If the numbers "feel" right and appear to make sense, go for it 😎

That's what we did.   Plan's holding up so far, after 4 years 🤞

Just read your nuts thread. Not all of it obviously as it is quite a long thread.

I have a lot more than you (not boasting), probably double, I am older, can probably retire but too frightened or unsure / worried to do so.

If I bought an annuity it would be enough (and a bit more) but I just can’t give that much money to an insurer.

i will be one more year until I’m 80 at this rate, how do I get myself out of this.

I am sure my health would improve if I could get the courage to retire. Financial services, not customer facing, more like programming, compressed hours, not physically demanding, finding the job stressful and I find myself dreading every day.

Help!

You are not alone in this . See the posts from @southcoastboy.

It is more of an anxiety issue than about money.

You might benefit from reading this thread, where the poster actually retired with less than SeaShell, I think.
A Paupers Pension Tale (Not many nuts to dig up) — MoneySavingExpert Forum

Wow, I am rich in comparison to that but still finding it difficult to press the button. Sigh.

Could you reduce to part time, so you get used to working less and using your pot more before you finally go?

Been part time on a 3 day week for 4 years! 

Still salary sacrificing into a pension.

Two small DB pensions taken early as worried about LTA so feel stupid about that now. Feel even stupider about paying LTA tax on a DC crystallisation in case LTA tax went up. Should have left uncrystallised in retrospect.

The LTA tax I paid (or the SIPP paid really) was effectively 2 years of intended drawdown so I feel annoyed with myself. However I am not able to see into the future.

Will never get that back but adding more in my pension to save more NI to get something back as pension income is NI exempt.

Cannot just retire, need to retire to something, trying to work out what something actually is.

Not wishing to vegetate in front of the television like Jim Royle.

EDIT: If I used 66% of my crystallised pot to buy a JL 50% RPI annuity with a 20 year guarantee I would definitely be OK. A big pot to hand over though (difficult to do) but it could enable a full retirement stress free (my State pension fully paid up two tax years ago). This is just a first world problem which I cannot solve.

I sound similar to you about the horrible LTA, I was so 90% close of kicking of a ramping up old DB scheme in March this year and only just finally decided to let it cook, pay extra taxes or pray the LTA just couldn't stay still till April 2028.

I was very happy with the LTA changes, but personally for me liked say 1.5 or 1.8M and on a gearing up and not limiting the 25% tax-free free figure, but I'm happy overall. 

Can I asked when did you activate pension?

LHW99

FIREDreamer said:

LHW99 said:

FIREDreamer said:

Albermarle said:u

FIREDreamer said:

Sea_Shell said:

So easy to get caught up in analysis paralysis.

If the numbers "feel" right and appear to make sense, go for it 😎

That's what we did.   Plan's holding up so far, after 4 years 🤞

Just read your nuts thread. Not all of it obviously as it is quite a long thread.

I have a lot more than you (not boasting), probably double, I am older, can probably retire but too frightened or unsure / worried to do so.

If I bought an annuity it would be enough (and a bit more) but I just can’t give that much money to an insurer.

i will be one more year until I’m 80 at this rate, how do I get myself out of this.

I am sure my health would improve if I could get the courage to retire. Financial services, not customer facing, more like programming, compressed hours, not physically demanding, finding the job stressful and I find myself dreading every day.

Help!

You are not alone in this . See the posts from @southcoastboy.

It is more of an anxiety issue than about money.

You might benefit from reading this thread, where the poster actually retired with less than SeaShell, I think.
A Paupers Pension Tale (Not many nuts to dig up) — MoneySavingExpert Forum

Wow, I am rich in comparison to that but still finding it difficult to press the button. Sigh.

Could you reduce to part time, so you get used to working less and using your pot more before you finally go?

Been part time on a 3 day week for 4 years! 

Still salary sacrificing into a pension.

Two small DB pensions taken early as worried about LTA so feel stupid about that now. Feel even stupider about paying LTA tax on a DC crystallisation in case LTA tax went up. Should have left uncrystallised in retrospect.

The LTA tax I paid (or the SIPP paid really) was effectively 2 years of intended drawdown so I feel annoyed with myself. However I am not able to see into the future.

Will never get that back but adding more in my pension to save more NI to get something back as pension income is NI exempt.

Cannot just retire, need to retire to something, trying to work out what something actually is.

Not wishing to vegetate in front of the television like Jim Royle.

EDIT: If I used 66% of my crystallised pot to buy a JL 50% RPI annuity with a 20 year guarantee I would definitely be OK. A big pot to hand over though (difficult to do) but it could enable a full retirement stress free (my State pension fully paid up two tax years ago). This is just a first world problem which I cannot solve.

Maybe there is some volunteering you would like / be able to do. You could try the links at

https://www.gov.uk/volunteering

I'm sure your experience would be welcomed in the right place.

OldScientist

GazzaBloom said:

When I see discussions on SWRs they seem to be calculated as fixed over the length of retirement not taking into account additional income such as SPs or other pensions that may start later in retirement, mine will vary as it will start higher for 8 years then drop once when my SP kicks in and then again 3 years later when wife's SP kicks in. 

So, over say a 40 year retirement, it may starts at 5% of opening portfolio then drop to 3 % after 8 years then down to 1% after 11 years for the rest of retirement, averaging around 2% across the whole retirement.

While products like timeline will take this into account, you're quite right that there has been little or no work in this area (unless anyone has a link?)

Just for fun I've calculated the maximum safe initial WR (IWR) prior to a single change in WR occurring after Y years (long-term WR, LTWR) for a 40 year retirement. Portfolio was 30% UK stocks, 30% US stocks, 20% UK bonds, and 20% UK cash, returns and cpi data from macrohistory.net .

IWR	LTWR	Year	Life Inc
3.1	3.1	N/A	124
6.1	2.5	5	118
8.1	2.0	5	111
9.9	1.5	5	102
3.9	2.5	10	114
4.5	2.0	10	105
5.1	1.5	10	96
3.4	2.5	15	114
3.7	2.0	15	106
4.1	1.5	15	99

 The first line in the table gives the conventional 'safe' withdrawal rate (i.e. with no change in WR), while the other lines give the maximum IWR available over the first Y years for the given LTWR. For example, in the second line, for those filling a 5 year gap before SP, with a long term WR (e.g., post SP) of 2.5%, the maximum safe initial WR was 6.1%. The final column is the lifetime income (i.e., the sum of the annual income over 40 years).

Fairly obviously, shorter gaps and lower long term requirements allow higher initial income.

The interesting thing (to me at least) is that including a step reduces the lifetime income (in other words, doing a simple weighted average of the different WR will overestimate the income available).

There may be more efficient ways of funding the gap than this (as discussed earlier in the thread).