Frack - your numbers may need to be checked. Not trying to argue with you, my friend but they are what they are.
Lets assume the 7% drawdown as requested, and a bank deposit rate of 3.5 % and inflation of 2.5%.
After 28 years, at age 83 & 85 you would have a pension of $37,464.36 PA in actual terms and due to inflation it would be worth $18,732.18 PA. The balance would be $515,161.75 which accounting for inflation would be worth $257,580.88.
In real terms you may be able to get the state pension at some point so this would slow down the reduction.
Unless you and wife are not in reasonable health there is every possibility that at least one of you will survive this date. Another 10 years and in real terms a pension of less than $10k a year.
Of course should bank deposit rates not be 1% above the inflation rate, which over the longer term is lost likely then the numbers get worse a lot faster. Sorry to bring not so good news to the party.
The current cycle of interest rates way above inflation is function of the GFC, and for many years people have had to live with deposit rates under the inflation rate - the number are horrible.
If inflation is 4.5% (at 1% more than deposit rate and the only adjustment) then after 16 years the income in real terms is less than $30k PA and you are still in your 70s. After 32 years your pension is now only $8k PA.
Anyway this is all academic and I post as a matter of interest inasmuch as future deposit & bond rates VsV inflation can decimate your future pension very quickly.
If we get a bout of inflation as in the lat 70s (remember 25% PA) then all bets are off :-)
I implore anyone to do a spreadsheet with the numbers and check for themselves with their own numbers and see how it looks in the longer term.
