Hariseldon58 wrote:I thinks that’s the essence of the problem, the search for an “answer” to the retirement drawdown question, it’s different for everyone, there is no single answer.
Personally I am eternally optimistic,I believe that things always pan out and I had no sleepless nights, from a rational outside perspective, I am almost certainly deluded ! Personally I would find 60% bonds excessively cautious, however it would actually work for me.
IE 35 years income required would be a reasonable guess as a maximum lifespan from here, 100/35 =2.85% per year drawdown, a 60% bond/ 40% equity portfolio would likely keep up with inflation and since my expenditure is in a range of 1.5% to 3% for a comfortable / luxury lifestyle, throw-in future state pensions for myself and Mrs Hari it would clearly be a sensible choice.
Equally my present 80%+ equity portfolio has sufficient margin of safety and will probably work out better, there is a chance that will not work out as well. However the last 14 years have given me a higher standard of living than I anticipated and inflation adjusted capital is over double the starting value, if I was to suffer a 50% permanent loss from here I would be no worse off than if I had taken the lower risk approach initially.
"Sequence of returns risk" is the issue here. If you have a 50% permanent loss now you will be fine. If a newcomer has a 50% loss now, with recovery just before he dies, the income he can draw down will be severely reduced.