Drawdown
How should I take income from my investments once I retire?
A drawdown strategy decides how much to withdraw, where that money comes from and how the portfolio responds when markets rise or fall. The aim is to make your retirement income resilient across a wide range of market conditions.
Step 1 · The income you need
A few figures to compare against
Guaranteed income means a State Pension or a final-salary (DB) pension. Everything is in today’s money. Your investments provide the difference: £17,452 a year once the guaranteed income starts, and the full £30,000 before then.
Compared on a Balanced — 60% growth assets / 40% defensive assets mix. Your income can dip to 85% of plan in a bad year, with 0.5% yearly charges.
Adjust these assumptions
Step 5 · Why timing matters
Why the order of returns matters
Two retirees can earn the same average investment return but experience very different outcomes.
- Good markets early
- Poor markets early
| Age | Good markets early | Poor markets early |
|---|---|---|
| 65 | £642,000 | £462,000 |
| 66 | £689,040 | £376,560 |
| 67 | £734,834 | £327,732 |
| 68 | £778,318 | £301,009 |
| 69 | £826,150 | £280,040 |
| 70 | £870,503 | £261,241 |
| 71 | £918,848 | £241,691 |
| 72 | £962,356 | £223,775 |
| 73 | £1,009,345 | £204,964 |
| 74 | £1,060,092 | £187,262 |
| 75 | £1,104,299 | £168,498 |
| 76 | £1,151,600 | £148,608 |
| 77 | £1,202,212 | £129,010 |
| 78 | £1,244,344 | £108,041 |
| 79 | £1,289,005 | £85,604 |
| 80 | £1,336,345 | £62,452 |
| 81 | £1,373,163 | £37,448 |
| 82 | £1,411,821 | £10,444 |
| 83 | £1,438,294 | £0 |
| 84 | £1,465,825 | £0 |
| 85 | £1,479,800 | £0 |
| 86 | £1,464,598 | £0 |
| 87 | £1,361,368 | £0 |
| 88 | £1,168,004 | £0 |
| 89 | £927,763 | £0 |
If markets fall early in retirement, withdrawals remove more of the portfolio while its value is already down. This is called sequence-of-returns risk.
Different drawdown strategies try to manage this risk in different ways.
A fictional example: both start with £600,000, take £30,000 a year and get the same returns, averaging 4.9% above inflation.
Not sure you can afford to retire yet?
Build a full plan first — your income, pensions and spending, year by year — then bring it back here.
Frequently asked questions
What is pension drawdown?
Drawdown means leaving your pension and investments invested once you retire and taking an income from them as you go, rather than swapping them for a fixed income. How much you take, and how you decide, is your drawdown strategy.
What is sequence-of-returns risk?
It is the risk that poor market returns happen early in retirement, while you are also withdrawing money. Two people with the same average return can end up with very different outcomes depending on the order the returns arrive in.
Is a cash bucket safer?
Keeping a few years of spending in cash can make market falls feel easier, because you are less likely to sell investments straight after a fall. But cash can grow more slowly than invested money, so it can mean lower long-term values. The comparison shows how it behaved against the same markets as the other strategies.
Which drawdown strategy is best?
No single strategy is best for everyone. The right approach depends on how much you value predictable income, how flexible you can be in difficult years, and how much you want to leave later. This tool is an educational comparison, not advice.