featured image for podcast episodeDrawdown Strategies: Karsten vs. Fritz

Drawdown Strategies: Karsten vs. Fritz
Episode 427

Episode Guide

Understanding drawdown strategies is crucial for financial independence, especially as many individuals approach or enter retirement. This episode features insights from Karsten from Early Retirement Now and Fritz from The Retirement Manifesto, both of whom share their unique approaches to withdrawing funds after retiring in June 2018. Karsten emphasizes the importance of asset location and has maintained cash flow without selling assets, while Fritz outlines his bucket strategy, which includes planning two years in advance and employing a system to create a 'paycheck' from savings. Both methods aim to minimize anxiety during market downturns and ensure a steady income during retirement. With their differing perspectives, they also highlight the significance of tax implications and dynamic spending adjustments in maintaining financial comfort throughout retirement.

Episode Timestamps

In this episode: the "average" withdrawal, Karsten's strategy, Fritz's strategy, fixed withdrawal rates, the bucket strategy, and refilling.

Preparing for retirement can look different for all on the journey to FI. All of our goals differ, but we are still in the mindset of positioning ourselves for the coming years. This week we are having a face-off between returning guests Karsten and Fritz, as they discuss their own receptive drawdown strategies, their advantages, and how you can best prepare yourself mentally and financially for your retirement. While a large part of preparing for retirement means saving, that does not mean you should be afraid to spend. Even in retirement, there are strategies that can allow you to not only spend comfortably within your means, but also spend confidently! 

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Fritz & Karsten:

Timestamps:

  • 1:35 - Introcution
  • 2:09 - Karsten's Strategy
  • 6:05 - Fritz's Strategy
  • 13:28 - Fixed Withdrawal Rates
  • 18:08 - Your Retirement Spending Mentality
  • 23:01 - The Source Of The Bucket Strategy Debate
  • 30:46 - Refilling The Buckets
  • 40:40 - The Cheap Gimmick
  • 45:13 - The Importance Of Rebalancing
  • 51:03 - The Key Takeaways/The "Average" Withdrawal
  • 59:06 - Conclusion

Resources Mentioned In Today’s Episode:

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