This should be prudent, as in reality you would cut back when the markets are down, you may have some months where you do a little bit of work and get a little bit of side income, you might not spend the full withdrawal amount, etc
Distributions will be taken first as income for the month and then any remaining withdrawal will be taken to re-balance towards the 75:25 allocation with any dealing costs picked up by poor Mr Z himself out of his £2,083. This should then skim off any parts of the portfolio that are doing well and hopefully give any flagging parts of the portfolio catch up while avoiding drawing on capital unnecessarily.
Helpful to breakdown the movements this month;
Shows the scale of the months volatility compared to the income and withdrawal. I’m sure things will bounce back.
Just a simple thought experiment really, would you be stoic enough to leave the market to it’s things and relax into your Financial Independence? Would you have half an eye on getting back into the workforce all the time, constantly worried about your portfolio running dry? How would you be feeling with nearly a years worth of withdrawals seemingly wiped out in one month? Not great and perhaps wishing you’d stuck the whole portfolio in cash, and not 75% in equities.
The power of foresight sure would be a nice thing to have and it’s a shame all those psychics don’t use their powers to predict what the markets will be up to. But using my crystal ball I can see that the markets haven’t recovered yet…looks like Mr Z will be flying low for a while to come. Stick to your guns.