Guyton-Klinger withdrawal model

RogerPensionGuy

This is a great thread to all posters, tks. 

I take all the information[that I under on board] and it's helpful to me.

One of my many views is trying to fine tune income reference SWR and only a guess of time/death is very tricky.

Plus possibly wanting more income in the early years of retirement, say 60 to 72 or 75ish is counter intuitive of keeping pots well stocked. 

I'm not paranoid about leaving lots in a SIPP for others eventhou the current IHT rules make it look sensible in some cases, but I don't plan my SIPP being empty when I expire to give me potential big spend options when old if required or desired. 

My biggest concern is a massive market correction of 40/50% down in the early years and a very long recovery time, maybe a double black Swan event or whatever. My glass half empty view is stock markets will be negatively different to the last 100 years. 

Reference all the above I'm doing a plan with various income streams of DB, SP, ISAs, GIAs, premium bonds and my SIPP will just be on the side topping up as required, SIPP plan is being in a low cost provider and say pulling out 3% or just under being very cautious, if markets tumble, I'll stop withdraws, if markets continue on the previous long-term 7/8% returns, then I'll up my take to maybe 5%ish and keep under review. 

Forgot to mention, I'm thinking of getting an annuity, maybe just a 10 or 15 year term to beef up income in them early years. 

One concern in my head now at 60/61ish is playing with all these various cash streams as or if I get older. 

It must be nice having a big old fat government or DB pension with a full SP kicking in a few years down the road and not having to get involved or getting others involved ensuring planned income remains steady. 

Cheers. 

MetaPhysical

The fact is that no withdrawal strategy can survive an extended crash early in retirement if you need to draw upon the funds for several years when the market is down.  GK is one approach to minimise the damage that such a crash could induce but it can't perform miracles.  All strategies will fail given extended crashes.  This is why having available cash is important too.  Personally, I want a buffer of three or four years of cash as a buffer to protect me from a major and extended market crash in my DC fund in the early years so I can let the fund recover.  I also have DB pensions to help me.

Hoenir

RogerPensionGuy said:

My glass half empty view is stock markets will be negatively different to the last 100 years. 

There's a book that covers this generational perception well. "This Time Is Different. Eight Centuries of Financial Folly by Carmen M. Reinhart & Kenneth".  You can learn much from reading history.