The goal changes with your stage of life
The young saver (roughly 20 to 35) can afford an almost entirely equity allocation: the real growth engine at this stage is regular contributions, not yet income. The family in accumulation (35 to 50) starts to benefit from capital already built up, but continues contributing regularly with a typical 80% Equities / 20% Cash split. Approaching retirement (50 to 65), the accumulated capital is now substantial and attention shifts gradually from growth toward preservation, with a more cautious allocation (60% Equities / 40% Cash).
The income and drawdown phase
Once the goal is reached — retirement, financial independence, or simply extra income — the same strategy supports the gradual withdrawal phase. Rather than cashing everything out at once, you withdraw a portion of the portfolio periodically, leaving the rest invested. A well-established rule of thumb is a withdrawal rate of 3 to 4% a year of the total portfolio: at these levels, portfolios have historically held their real value over time, allowing withdrawals to continue indefinitely without depleting the capital.
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