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Also I think most of us on this board should have at least 1/3 to 1/2 of your retirement coming from fixed incolme sources anyway - Social Security and pensions for prior employers. It seems to me that this cushion should be sufficient to allow me to not worry about establishing bond ladders or buying CD's.

I prefer to deduct my fixed benefits like SS from my cash needs. The remainder is what I budget for. Stating a fixed percentage of bond investment doesn't strike me as very useful either. What I want is to match my reasonably safe cash flow with my cash needs (match maturities.) The whole point of a bond ladder for me, is that I can hold on for 3 to 5 years without needing to sell stocks. Other posts not-withstanding, the market does stay down 2 to 3 years at a streach.

If you take dividends from stocks, cupons from bonds, and maturities from a bond ladder into account; it takes surprisingly little in bonds to provide 3 to 5 years protection. I would never own a bond with a maturity of more than 5 years, nor would I ever invest in a bond fund with indeterminate maturity. Over 5 years, I'll trust equities.


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