Best resources on draw down models/strategies?

[chasingthegoodlife]

Hi MMMers.

As we edge closer to husband's retirement date, I am starting to think a little more about withdrawal models and how we will adjust the withdrawals in response to market conditions.

I will be continuing to work part-time for at least a few years and our yearly budget includes a fair amount for 'sinking funds' like renovations, travel and car replacement that we could pause if needed so there is a lot of flexibility but I feel that I want to go in with a considered plan rather than be driven by my Inner Bag Lady emotions.

Does anyone have a favourite article or resource covering drawdown models or strategies they could share a link to? (books I can order online are great too)

Thank you, it will be very much appreciated.

FYI - We are Australian, keen to look at resources from anywhere but eg. tools to factor in Social Security will be of limited use to us.

[2sk22]

In terms of books, Michael McClung's book "Living Off Your Money"  is a good start but its a little dry.

There are some useful pages on the Boglehead Wiki and this one is a good starting point: https://www.bogleheads.org/wiki/Withdrawal_methods

[2Birds1Stone]

Just because you're in Australia doesn't mean that SS/Pension schemes aren't similar/applicable just because they are written from the perspective of a different country.

I second McClung's book, and the fact that it's written more like a textbook. ERN does an analysis of the withdrawal strategies presented in the book, so the SWR series on ERN's blog is very useful, even for an Australian.

Give this a listen, then internalize the concepts....... https://www.allthehacks.com/die-with-zero-bill-perkins/

You're much more likely to squander the best years of your life worrying about dying with enough to cover every "what if" than you are of actually running out of money.

[Ron Scott]

There are some useful pages on the Boglehead Wiki and this one is a good starting point: https://www.bogleheads.org/wiki/Withdrawal_methods

You need a strategy tailored to your portfolio and needs, but once you get it going it’s pretty straightforward. Agree that BH is (again) excellent on this topic.

[theninthwall]

I like the Rich, Broke, Dead visualizer. You can factor in additional incomes (multiple if needed) and customize tax to suit Australia.

https://engaging-data.com/will-money-last-retire-early/

[bacchi]

Another +1 for McClung's book. He doesn't use AUS data but he does use US, UK, and Japan datasets for his analysis.

[MMMarbleheader]

The user Zphr on Reddit has some amazing postings on this and gaming the Fafsa

[chasingthegoodlife]

Thanks everyone, these are exactly the kind of tips I was hoping for and I will check them all out.

[chasingthegoodlife]

Just because you're in Australia doesn't mean that SS/Pension schemes aren't similar/applicable just because they are written from the perspective of a different country.

Slightly off topic but in Australia we don’t really have anything quite like US social security.

We have Superannuation (which is a tax advantaged account with withdrawal restrictions similar to a 401k or an IRA) and a means tested Age Pension that is paid from 67years to people below a set income and assets threshold with a gradual taper-off rate.

A homeowner couple with assets/investments of more than $1,012,500 AUD won’t qualify for any Age Pension, and given that I’m only 41, we hope and plan to remain ineligible for the Pension forever or at least for many decades.

However many self-funded retirees do eventually spend down their capital and qualify for some Age Pension (for any Aussies reading - the MoneySmart calculators and Noel Whittakers website are useful resources for factoring pension into your calculations) .

[deborah]

Before you retire, you need to think about taking all your leave (including long service leave) before your actual retirement date. You accumulate superannuation during leave, so this could pay you 11% (or 22% if you’re taking long service leave at half pay) more. It could also give you a period of time to assess whether your FIRE plans work.

[chasingthegoodlife]

Before you retire, you need to think about taking all your leave (including long service leave) before your actual retirement date. You accumulate superannuation during leave, so this could pay you 11% (or 22% if you’re taking long service leave at half pay) more. It could also give you a period of time to assess whether your FIRE plans work.

Thanks @deborah, that’s a great tip that I hadn’t considered.

[2Birds1Stone]

Just because you're in Australia doesn't mean that SS/Pension schemes aren't similar/applicable just because they are written from the perspective of a different country.

Slightly off topic but in Australia we don’t really have anything quite like US social security.

We have Superannuation (which is a tax advantaged account with withdrawal restrictions similar to a 401k or an IRA) and a means tested Age Pension that is paid from 67years to people below a set income and assets threshold with a gradual taper-off rate.

A homeowner couple with assets/investments of more than $1,012,500 AUD won’t qualify for any Age Pension, and given that I’m only 41, we hope and plan to remain ineligible for the Pension forever or at least for many decades.

However many self-funded retirees do eventually spend down their capital and qualify for some Age Pension (for any Aussies reading - the MoneySmart calculators and Noel Whittakers website are useful resources for factoring pension into your calculations) .

Oh wow! That's good to know. There are similar scheme's in places like Denmark, where a married couple with significant savings won't get shit from the government, but a broke single person would get enough to leanFIRE without a secondary income.

[chasingthegoodlife]

Just ordered the McClung book (after giving up on recovering my Amazon account and creating a new one. I have set up a security question that makes no sense to me and I cannot be bothered calling the US to deal with it.)

Does anyone have thoughts about Wade Pfau's 'How Much Can I Spend In Retirement?'?

[MDM]

Just ordered the McClung book (after giving up on recovering my Amazon account and creating a new one. I have set up a security question that makes no sense to me and I cannot be bothered calling the US to deal with it.)

Does anyone have thoughts about Wade Pfau's 'How Much Can I Spend In Retirement?'?

I don't, but Wade Pfau’s new book: How Much Can I Spend in Retirement? - Bogleheads.org got 50+ comments.

[chasingthegoodlife]

Thanks MDM, that's really helpful.