A Purple Life did a great job recently blogging about her evolution of spending money. It’s very different – especially when habits are well-ingrained after years of planning and saving. Talking of changes – I don’t think you get a much bigger one than switching mentality from saver to spender. Moving to the drawdown side of retirement is a big change, even when it’s something you’ve been planning and dreaming about for a while. I find that empowering but I realise to a lot of people it can be scary to embrace the uncertainty. It’s not a black or white question like a maths exam – it’s grey and muddy. That’s why I consider the emotional side of making the jump the tougher side to figure out. As things change, as you learn more – you adapt. This isn’t a “do it once and you’re done” activity. What matters is that you understand your own assumptions. But I’ve worked in risk management too long to ever see data as more than a guide to decision making.Īnd if I could share one thing that’s what it would be. Historical data is great and it obviously helps to improve your best guess. I prefer to acknowledge it for what it is.Ī huge set of assumptions about pretty much every aspect. Pretending it is may give you a sense of comfort.
“Planning for early retirement is an educated leap of faith” What I want to write about is accepting the ambiguity in any plan, however good (or bad 😉 ) The assumptions and testing behind each simple statement.īut that’s not what I want to write about now else this post will go on forever. Not that exciting eh? I could and probably will go into more detail at some point about each.
#EARLY RETIREMENT DRAWDOWN PLUS#
Have a decent amount of flex in plans plus back-ups Invest in work and personal pensions so that they meet cash-flow from 60ģ. Save & invest enough in ISA/other to provide my required cash-flow between FIRE’ing and 60Ģ.
It basically boiled down to three things ġ. It doesn’t have a fancy name or a long string of supporting analytical evidence.
I’m sharing this in the spirit of answering the challenge set, not as advice. So – what was the grand drawdown plan then? First – clearly I am not a financial adviser in any shape or form. What have I learned and what can I share that may help others looking to do the same at some point? How does the reality compare to the theory? I’ve been through both sides when making my own transition. Do I really want to make the jump? Will it be worth it? This side of pulling the trigger is much harder for some than others. At some point all the planning becomes a question of belief. The second part though is far less clear cut, the emotional side. Questions to be answered about risk, reward. First up, there’s the financial side, the logical side if you like. And if all goes well, I’ll be doing it for a long time yet, hopefully.įor me, there’s two distinct parts to making the transition from planner to do-er. Well, the one thing I do have is actual experience. Never was good at turning down a challenge yet after all.īut what can I offer above and beyond the many, many words of wisdom already shared on this? Especially with Indeedably doing his usual fine job of eloquently expressing much of how I think about it. So when Sovereign Quest threw down the challenge in March to write about decumulation (inspired by Monevator’s great 3-parter) – it seemed about time to get on with it. As someone on “the other side” of the FIRE journey, I’ve been meaning to write about retirement drawdown for a while.
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