Accumulation is a global problem with a fairly standard answer. Decumulation is a local problem with a different answer in every jurisdiction — and the order in which you draw from your pots often matters more than the assets inside them.
Start with the treaty, not the portfolio
Pension income is usually taxable in the country of residence under Article 18 of a typical OECD-model treaty, but government-service pensions are frequently reserved to the source state, and several treaties — including some the UK has renegotiated recently — assign lump sums differently from periodic payments. A UK 25% pension commencement lump sum that is tax-free in the UK is not automatically tax-free where you now live. Portugal, Spain and France have each taxed it in circumstances that surprised the recipient.
The practical rule: establish, in writing and before the first withdrawal, which state taxes each income stream. A withdrawal made in the wrong tax year, or in the year of a residence change, is not reversible.
The sequencing question
Most retirees hold three categories of money: taxable (general investment accounts), tax-deferred (pensions), and tax-free or tax-favoured (ISAs, certain bonds, principal residence). The conventional advice — taxable first, then deferred, then free — is a reasonable default in a single jurisdiction and frequently wrong across two.
Considerations that change the order:
- A low-tax window. Retiring to a jurisdiction with no personal income tax, or a favourable inbound regime with a fixed term, argues for accelerating pension withdrawals inside the window rather than after it.
- Estate exposure. Where a pension sits outside the estate for inheritance-tax purposes and a general account sits inside it, drawing the taxable account first serves both objectives. Where the reverse is true, so is the sequence.
- Currency. Drawing sterling to spend euros in a weak-sterling year is a permanent loss. Holding two to three years of spending in the destination currency removes the need to sell at a bad moment.
- Bracket management. Filling a lower band each year with pension income, even when you do not need it, beats a single large withdrawal later.
The first five years decide the next twenty-five
Sequence-of-returns risk is the reason two retirees with identical average returns can have opposite outcomes. A poor first five years, combined with fixed withdrawals, permanently impairs a portfolio. The defences are unglamorous and effective: a cash and short-bond bucket covering two to three years of spending, a flexible spending rule that trims discretionary withdrawals after a bad year, and a rebalancing policy that refills the bucket from whatever has performed.
Residence changes mid-retirement
Retirees move — to be near grandchildren, for healthcare, for cost of living. Each move re-opens the whole analysis: treaty, wrapper recognition, succession law, currency and reporting. Some wrappers travel badly. A structure that is efficient in Dubai can become a reporting burden in Italy. We build a "portability note" into every retirement plan setting out what would need to change under the two or three most likely destinations, so a move is a decision rather than an emergency.
What we produce
A written decumulation plan: the order of withdrawals by pot and year, the expected tax in each jurisdiction, the currency plan, the cash buffer policy, and the trigger events that would require a rewrite. Fixed fee, reviewed annually, no commission on any product inside it.
