if the stock market drops 40%, your lifestyle next year will change dramatically.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.This gives you a buffer that should cover most market dips.
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