No. of Recommendations: 6
Achieving financial independence and then investing during retirement
This post should be on the Retirement board, not this board.
Anyway. #7 is wrong. set aside N years of living expenses in cash or cash equivalents. I recommend 3 to 5 years.
That's the "3 bucket strategy", which has been totally debunked. It does not do what people think it does for them. It is merely an illusion of safety, but doesn't provide any safety.
The right way to handle it is simply maintain your chosen asset allocation. When you withdraw money, do it proportionately from stocks & bonds so as to move toward your AA.
When stocks are down -- which is what people are afraid of -- you would be selling bonds, not selling stocks. The fear of "having to sell stocks when stocks are down" is empty--you won't be selling stocks.
