Spend-down retirement
Instead of living only on returns, spend your savings over a chosen horizon. Pensions are the floor; capital is meant to be used.
What it is
A spend-down plan sets a level budget that uses your savings by a chosen age, leaving a reserve if you want one. Because you use capital as well as returns, you can spend more each month than with a fixed withdrawal rule.
Who it suits
People who prefer to enjoy their money while healthy rather than leave a large estate, and those with secure lifelong pensions that cover the basics.
The Swiss angle
AHV and a pension-fund pension continue for life, which makes spending down safer in Switzerland than in many countries. Lump sums give flexibility but shift longevity risk to you.
How to model it
Use the spend-down planner for the monthly budget, and the lump sum or pension tool to decide how much lifelong income you want. More in die with zero, rent for life.
Tools for this plan
Terms
Frequently asked questions
Is spending down the same as running out?
No. A spend-down plan has a planned horizon, a reserve and lifelong pensions underneath. Running out is what happens without a plan.
How do I protect against a long life?
Plan to a late age such as 95, keep a care reserve, and consider taking part of your pension fund as a lifelong pension.
Related reading
Mindset
Rent for life, die with zero: spending your money on purpose
Most savers end life with far more than they needed. Why a plan that spends down on purpose can pay for more living, and the risks that stop you going to zero.