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Subject:  Re: Retirement Needs Formula? Date:  10/6/2013  12:35 PM
Author:  Rayvt Number:  73458 of 78166

The traditional TMF way to deal with that problem is to keep 5 yrs living expenses (only 20% of assets) in a laddered maturity bond portfolio. You live off the interest and the one bond that matures each year. In normal years you sell 4% of assets and buy a new 5 yr bond. If the market crashes, you defer replacing the bonds until after recovery.

That's the "cash bucket" method. And it is a mirage. It's an emotionally comforting story for a technique that is a failure financially.
Here's some other ways to describe it, all accurate:
* When the market goes down (crashes), shift your asset allo