Investment - extraction level

[dave123456]

Hi,

I reach 50 next year and would like to look at retiring.

My role is pretty well paid and carries a level of equity that I’d be walking away from but my current mindset is that I’d be spending valuable time earning more money than I really need.

Has anyone come up with a good plan for deciding the level of investment extraction they can make when they are happy to end up with not a lot. I know it’s a difficult question to answer but my current thinking is:

I have a pit of investments and 4-5 rental properties.

I intend to rent 4 properties, this roughly covers my bills in my house, utilities, council tax and food.
The 5th property I’ll use to run a hobby business, the idea being this makes my pocket money and keeps me from having too much time to waste too much money.
This leaves a reasonably large pot to draw on for other purposes, I have no children so my intention was to draw 5% per annum and see how I get on.

Based on the above I should get a level of income which is similar to my current salary, which, after tax, sees about 50% currently saved.. so I don’t currently spend huge amounts.

The basic question is; is 5% a reasonable amount if I’m not seeking to protect my assets? I think a 35 year time frame is reasonable and I’d still be left with c£2m of property if worse came to worse…

TIA

[Soloman Dodd]

I think that's reasonable.
I took 4% out of some bonds I inherited and they more than held their own over the last 20 years.

Of course in real terms inflation would be a factor, but it doesn't sound like it will affect you.