But I refuse the idea of no withdrawals.This doesn't eliminate the SORR problem. The only way to avoid SORR is not to make any withdrawals.
Of course I won't have 25% cash for the remainder of my retirement. As noted, it's for SORR purposes. I plan to withdraw from that bucket for the first 6 years of retirement. It's the "spend" part of the portfolio for the first segment of retirement, for age 60-66.
If your portfolio is declining, it doesn't matter whether you're withdrawing cash or selling stock, it's still going down. If you're concerned about stocks tanking, then have a low % of equities. It will mitigate the problem but not eliminate it.
- We will have more than enough income to live on when I retire.
- We are retiring at age 60 and 62, with plans to travel extensively the first 5 years.
- I want that 5 years of travel in cash.
- After 5 years, the cash will be depleted, but the house will be paid off, freeing up $30k per year.
- At that time, we will have no need to withdraw from the portfolio if SORR hits.
So yeah, I am well aware that cash doesn't protect us from SORR. But it DOES protect our plans to travel while we're still young enough to do some of our more ambitious trips.
Statistics: Posted by Sandi_k — Thu Aug 08, 2024 11:51 am — Replies 68 — Views 4846