I sell shares to spend, so yes I am spending from stocks/bonds. But since I sell the same number of shares regardless of the market status, the proceeds vary from quarter to quarter and either I use the buffer to make up for the shortfall in down market as my spending does not change, or I replenish/overfill the buffer during up market. Around 69/70 I plan to no longer sell shares and just spend down the buffer till RMD @73.If you are spending from the buffer, but then replenishing from stocks/bonds, that is essentially spending from stocks/bonds. Perhaps there is some smoothing if you wait for market peaks to replenish.Interesting thread. My retiree withdrawal plan is to sell from Taxable a predetermined number of fund shares per year, to reduce the amount of sale upon fund distributions, and to take care of inflation by the long run appreciation in share prices of a ~60/40 portfolio.
Not wanting to change our budgeted expenses as share prices fluctuates, I keep a 2.5-3 year of budgeted expenses in cash/ST as a buffer to absorb share price volatility. There were occasions in the last few years when I did have to take money out from this buffer to support budgeted and some unbudgeted expenses.
FWIW the money for this buffer came from our severance money when we both got severed 7 years ago and decided to retire. The current plan is to stop replenishing this 2.5-3 yr buffer around 69-70 before my SS is scheduled to start, and spend it down until RMD starts at 73.
Statistics: Posted by DSBH — Wed Sep 25, 2024 7:17 pm
