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I started through this thread looking for some specific recommendations on where to invest the 3-5 year cash/equivalents. But I became caught up in all the detailed planning that many of you are making. I figured that I should drop in my 2 cents worth based on actual experience of 6 years of retirement starting at 56. My first recommendation is to split your IRA into 2, one to make penalty free pre 59.5 withdrawals. The second as an emergency in the event that you need to make an additional withdrawal after 59.5 but before your "5 years or 59.5 age whichever is later" point.
That is what I did. I started with a 7% withdrawal on IRA-1 and have made some individual withdrawals from IRA-2 subsequent to becoming 59.5.
There were some times before turning 59.5 that I wanted (notice not needed) some additional funds. The one time I needed additional funds when my wife required major surgery and I had to come up with the expenses that my insurance did not cover. In all the responses to this thread I didn't see anyone mention planning for this event.
I have some other experiences relating to GNMA, FHMA etc. which are the subject of another post.
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