eldynamite wrote,

Here's how it works: Each year I plan to set aside my "minimum wage" in a cash account that holds two years worth of minimum living expenses at the start of each year. I then adjust my nest egg target for inflation, and if the remainder is less than my target, I go into austerity mode. If I have an excess, it will be split more or less evenly between more spending (think mai tais) and increased capital. First, I take care of minimum living expenses, then inflation, then programmed growth, then high living. The final step is to rebalance the portfolio. My personal taste in asset allocation:

8% Cash
12% Bonds
40% SPY and/or Rule Makers
25% DIA and/or Foolish 4
15% QQQ and/or Rule Breakers

The plan is not difficult to formulate, and if assets stray very far in either direction from the target, it can (and should) be reformulated.

If this has any merit, it lies in the conviction that one should plan for a nest egg 25% larger than what is needed to generate the desired income.

I think your plan is very workable and conservative.

It's similar to the "Pay Out Period Reset" model discussed a few months ago, see link:

http://www.geocities.com/wallStreet/8257/popr.html

intercst