Decumulation
Also known as: Wealth Drawdown, Retirement Spending, Portfolio Depletion
The process of systematically spending down accumulated wealth during retirement to fund living expenses.
Detailed Explanation
Decumulation is the systematic process of converting accumulated wealth into regular income during retirement. Unlike accumulation where you build wealth over time, decumulation requires carefully managing the drawdown to ensure money lasts throughout retirement while maintaining purchasing power against inflation. This involves strategic asset allocation, withdrawal rate planning, and sequence risk management to balance current income needs with long-term sustainability.
Related Calculators
Related Terms
Withdrawal Phase
The retirement period when you systematically withdraw money from your accumulated wealth to fund living expenses.
Sequence of Returns Risk
The risk that poor investment returns early in retirement can permanently impair a portfolio despite good later returns.
Withdrawal Rate
The percentage of retirement portfolio withdrawn annually to fund living expenses.