lotomony,I know nothing about Canadian tax laws, but here is a general approach.1) Estimate your cash requirements as you've already done.2) Subtract any annuities from your cash needs (Social Security in the USA).3) Is the remainder more than 4% of your liquid capital? If so either find another source of income or re-budget.4) Set up a 5 year bond ladder with about 13% or your capital. That is, with $1,000,000 in liquid investments, put $130,000 into bonds. 5 yr: 27,821 (that's a 3% inflator per year) 4 yr: 26,224 3 yr: 25,461 2 yr: 24,720 1 yr: 24,000 Total 128,226Annual dividend on this ladder would be $7,693 (at 6%)5) Invest the remaining 87% or 870,000 in stocks. That will yield a dividend of about 1.0% (S&P500 index fund like VFINX) or $8,700. 6) Add up $24,000 $7,693 and $8,700 and you get relatively certain cashflow of $40,393 in the first year.7) As your bonds mature, replace them with new 5 year ones, selling stock as required. Add on 3% each year.(next year buy $28,655 worth of bonds.)8) If the market is low for a year or three, don't replace the bonds until it recovers. Unless we suffer a 5+ year depression, that should do it for you. The numbers of course are overprecise, round off to the nearest thousand when you buy your bonds and don't sweat it.Cheers,GW
5 yr: 27,821 (that's a 3% inflator per year) 4 yr: 26,224 3 yr: 25,461 2 yr: 24,720 1 yr: 24,000 Total 128,226
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