Planning for retirement is important. Fortunately, 60% of working Americans are saving something toward their retirement.

Outliving Your Money In Retirement

Image courtesy of graur razvan ionut at

Do you know what the top concern is once people reach retirement? It’s the fear of outliving their income. Yes, they worry about running out of money. That’s why practical retirement withdraw strategies are important!

Are you still pretty far from retiring? Well, don’t go anywhere because this information can have an impact on you too! Understanding and planning your drawdown can have an effect on the age in which you retire and how much of a nest egg you’ll need to cover living expenses in retirement.

Retirement fund drawdown strategies can vary

There is not a one-size-fits-all solution for drawing down investments and spending in retirement. Oh, if only there was!

Lately, a number of people in the financial independence space have written about their retirement withdrawal strategies. (I’ve linked to a number of them near the end of this post if you want to check out how other people plan to manage their retirement spending.) Seeing their plans in writing has motivated me to type out our plan and share it.

Something of note about all these different strategies though: Most of them are future plans. But Karla and I are living it right now. A well-thought-out retirement strategy is key for us RIGHT NOW or we could potentially burn through our money way too quickly.

So, here it is: our Maximize Your Money retirement withdrawal strategy.

What do we consider retirement assets?

We don’t look at our total net worth as part of our retirement drawdown plan. For example, we don’t consider the values of our house or RV which are paid-for. I know that some people consider everything in their retirement withdrawal strategies but it’s our preference not to.

Additionally, we have money invested in a number of startups that aren’t included in our planning. (Decent chance we’ll never see that money again, but I believe it’s nice to support small startup businesses when you can.)

If something goes wrong with our plan(*) we can change our perspective on one or more of these assets, but for now we just ignore those illiquid items in the plan.

*Might something go wrong? (A short tangent…)

Honestly, financial planning is about ruthless prioritization and adjusting to life situations. There are no absolute guarantees. Investments might do better or worse than planned. We try to take care of ourselves but honestly have no idea what might happen to one of us in the future. We might want to travel more someday. Or we could get tired of traveling and cut that out of the budget.

We just don’t know for sure what the future will hold. Neither do you. And that’s okay.

Make a plan based on the best data available at the moment and make adjustments in the future as needed. It’s all you can do – and it’s perfectly fine.

Here is our retirement asset breakdown

Retirement Withdrawal Strategies - Our Asset Allocation

You can see we don’t own any bonds right now in our investments. We do hold about 10% in cash though. We also have about 1% of our money in an HSA account.

Why so much cash?

I’m glad you asked!

This is a key part of our retirement drawdown planning. Stock market corrections happen. In fact market down cycles happen every few years and tend to last 18-24 months on average. Before you get scared though, remember that, even with all these swings over the years, the market still has a cumulative average return of around 10%.

Retired investors need to be prepared for these situations. We don’t want to get caught in a market of under-valued stock prices and be forced to sell. To help us avoid that we hold between 2-3 years’ worth of living expe