ARF Drawdown Rate

Hi,

Looking for guidance on what's the general ARF drawdown rate to assume for pension planning.
Would 4% be typical?

Rgds

Once you reach age 61, you must draw down a minimum of 4% pa. That rate increases to 5% at age 71.

Understood, but for planning purposes is 4% a good number to assume when retiring at 65?
Or is it too conservative?

4% is the typical rate for the reasons outlined by Conan above. But there's nothing to stop you taking out more if you want. People have more active lives when they retire as they are healthier and do more, so they should be looking at spending more in the early years and reducing expenditure as they get older. But there is always the fear of running out of money (if you are 90 and living on the OAP, will you feel you are missing out by not having more money?) and what about the kid's inheritance? Never mind the fact that they are nearing/in retirement themselves!

So people tend to stick to the 4%/5% deemed disposal rates and either the nursing home gets or the kids get it.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Rust40 said:

Understood, but for planning purposes is 4% a good number to assume when retiring at 65?
Or is it too conservative?

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Depends where the money is invested.

SBarrett said:

Depends where the money is invested.

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Consensus fund with ave 7%pa growth.