Personal Investments • Cash allocation in early retirement

Assuming you’ll have no source of income other than portfolio withdrawals, keep 5 years of expenses in cash equivalents.

That should get you through the vast majority of stock market downturns, so you won’t have to sell stocks at reduced prices.

This is very conservative. The OP has 20% in bond/MMF and plans on 2.5% withdrawal.

TravelforFun

William Bernstein has suggested a TIPS ladder (or the equivalent) of 20 to 25 years of residual expenses, with the rest of the portfolio in stocks: https://www.whitecoatinvestor.com/berns ... -the-game/

So I don’t agree that 5 years in cash equivalents is very conservative, relatively speaking.

In any case, the purpose of the portfolio’s allocation is to meet the (financial & psychological) needs of the retiree — regardless of how the allocation is labeled.

Statistics: Posted by delamer — Fri May 10, 2024 9:31 am — Replies 47 — Views 4294

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