Let me try to clarify. For giggles, let's just assume I'm retiring next week and I had $2.5 million in retirement savings and my expenses are $100K/year.Forgive if my assumptions are widly out of range for your situation and tolerance.
My goal and thinking is to take the the retirement portfolio and separate it into 3 buckets to use the 3 bucket strategy.
Bucket 1 = 5 years/$500K in a MMF/Bonds/Other conservative
Bucket 2 = 10 years / $1MM in a 60/40 in 3 fund portfolio
Bucket 3 = 10 years / $1MM in a 90/10 in a 3 fund portfolio
My living expenses always come from Bucket #1. If Bucket #2 & #3 have gains, I refill Bucket #1 with those gains. If Bucket #2 and/or #3 have losses, do nothing.
On top of the above retirement portfolio, I'd prefer to have 1 year of emergency funds in a MMF/HYSA/Other ($100K), a paid for house, and possibly working part time (because I enjoy working).
For the time being (next 10-15 years), I'm simply planning on shoveling everything away in my retirement portfolio and continue to build my 3 months of emergency funds up to 6 months and beyond.
Over the last couple of days I've made some adjustments to the funds with higher expense ratios. I'll continue to get educated on bonds.
Once I hit FI, and 10-15 years out I'm sure the plan will change, but that's my current plan on paper.
Statistics: Posted by Gringacho — Thu Jan 09, 2025 12:53 pm