DrFfybes wrote:I've been watching this thread, even started to reply a few times, and I'm going to upset some people by saying that there is no such thing a a SWR.
It doesn't exist, if you just want a safe, secure income that isn't going to run out before you die, buy an annuity. For some people having a small secure annuity for basic income will work from a 'low stress' point of view.
We have DB schemes to cover basic needs, so want a top up between now and SP age, and a lesser top up once SP arrives. I don't use percentages, I use pounds, as that is what I spend.
Our plan is (or was until MrsF kept on working and we got an inheritance) 'pots'.
Pot 1 in our case is our DB pension, but for you it could be a HYP that generates a basic level of income from natural yield.
Pot 2 is the discretionary spend....
Say, I want £10kpa for 12 years until SP. I ringfence £100k in a Vanguard or similar account and autosell units each month to generate my desired income. I can choose (say) their Lifestrategy 100% equities fund (and/or VHYL), take the circa £200 annual divi and sell £650 of my initial holding every month to get my target. That 'pot' is withdrawn at 8% (or 10% including divis) so might last the 10 years, or longer or shorter, but that is easily monitored on an excel sheet. Add in a 'cash reserve' of 12 month's spend and it means if stocks drop I can reduce the withdrawal and if they rise then fine. The point being that pot is all I have to look at for that decade, the rest is your base income provision pot, and another discretionary pot that remains untouched and invested for growth.
Paul
... and I'm going to upset you by telling you that natural yield is absolutely no defence against poor conditions where equities struggle in general. Dividends get cut, shareholders get diluted, and dividends payouts are by no means guaranteed to keep up with persistently high inflation