Inside My Financial Plan: Safe Withdrawal Rates & Strategies

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Feb 3, 2026

Thuy Lam, Certified Financial Planner with 20+ years building retirement and cashflow plans. She talks about why the 4% rule can mislead. She explains bucketing for short, mid and long-term needs. She covers stress testing plans with Monte Carlo and modeling what-if spending ceilings. She outlines timing drawdown actions, tax-aware withdrawals, and when to adjust spending after market shocks.

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INSIGHT

4% Rule Is Only A Starting Point

The 4% rule is an oversimplified guideline that ignores taxes, time horizon, and spending phases.
A comprehensive personalised retirement plan is the only way to know a safe sustainable withdrawal rate.

ADVICE

Use Cash Buckets For Stability

Create short-, mid-, and long-term cash buckets and map them to specific goals and time horizons.
Refill buckets systematically (e.g., annual review) and withdraw from cash during down markets to avoid selling equities at lows.

ADVICE

Rebalance By Trimming Winners

Rebalance surgically by trimming overweight winners rather than selling assets that are down.
Replenish cash only if it's below your target bucket amount and consider personal risk tolerance when deciding actions after a market dip.

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One of the most common questions I get, and honestly one of the biggest sources of anxiety for anyone nearing financial independence is: "How much can I spend without running out of money once I quit my job and start living off my investments?"

It's one thing to see a big number in your investment account; it's another thing entirely to hit the "withdraw" button and start taking money out.

Research, and my own experience shows that many Canadians end up underspending. They live a smaller life than they need to simply because they don't have a structured process they can trust.

Some blindly follow the "4% rule," while others just live off dividends, pensions, and/or government benefits, never touching their principal. This often results in a massive amount of money left over when they pass away. That is money that could have been spent enjoying life, creating memories with family, or donating to charity, rather than leaving a giant inheritance, and a giant tax bill to the government.

So, how do we find that balance? How do we calculate a spending number that is safe, but still lets us enjoy our lives?

To answer this, I invited Thuy Lam back on the show. Thuy is a Certified Financial Planner with over 20 years in the industry who recently built my personal financial plan. We discuss the specific cashflow plan she created for us, and the relevant insights and best practices you can apply to your own situation.

We dig into four critical areas:

First, the "Safe Withdrawal" question: We move past the 4% rule and discuss how to determine a sustainable spending rate that factors in current market conditions.
Second, the "Bucketing Strategy.": Thuy breaks down how to allocate your portfolio for short-term spending versus long-term growth. This is huge for keeping anxiety low when the market drops.
"Stress Testing" your plan: We talk about why using a simple average rate of return (like 8%) is a dangerous mistake, and how Monte Carlo simulations can help you see if your plan survives extreme scenarios.
Dynamic Spending Adjustments: We cover exactly when to tighten the belt if markets underperform, and how to safely increase spending if returns are high, so you don't die with a giant portfolio you never got to enjoy.

We're going to cover all that and more. Enjoy the Episode!

Links from the episode:

Meet with Thuy: Free Introductory Meeting & Discount Link

Free Access to my investing guide: What I Invest In and Why? (Kornel's Portfolio)