Are you drawing too much from your retirement accounts?

I came across this blog article that was written by Pattie Lovett-Reid from the BNN network in which she talks about what retirees need to help understand if they are drawing too much from their retirement accounts. One of her points is that if you had set up your retirement plans to draw out 4% or 5% of your investments each year but your investment accounts have dropped you might actually be drawing out closer to 8% of the current value of the account. And that if you continue to draw the same amount you may find that your savings will not last as long as you had thought.

So what can you do if you find yourself in this situation? What you could do is rather than sell your investments while they are down is to set up a line of credit to draw on to cover your monthly expenses and then pay this back once your investments recover. The amount you pay in interest on the line of credit might be a lot less than loss you would take on selling your stocks in a down market and if these are dividend producing stocks you can continue to get the dividends while you wait for the stocks to recover.