If you are only going to be pulling 3-4% from this as a source of income, more equity would be very appropriate. Heck, there are some Stock div funds (100% stock) that pay 4% in dividends that are capped at 15% tax due to capital gains that would work for you; and they still grow much like the S&P (though with a bit less volatility due to the high div).I would not have more than 20% in fixed income, as long as you plan to stay at or below 4% withdrawals. If you go to 5%, I would then consider going to 60/40.As far as how much in managed, there is no real consensus on that but 50% of what you have in index would not be bad (e.g of 100K total, 66K in index, 33K in managed, of same asset classes). Having it as a hedge is the important part. I am of the camp that believes you can beat index funds with well managed mix of mutual funds. Looking at some of the best 1,5,10, and 20 year funds proves this. Take at look at the Fidelity Contrafund compared to S&P over the last 20 years.
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