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In other words, will you always have 5 years of living expenses, or sometimes go down to 2 or so, depending on the market?
Is it best to make that 5 years expenses a hard and fast rule, or what?

When the market is down you do not sell and you living expense fund will decrease. The assumption is that within five years the market will recover and you can start to build up your fund.

The five years is your choice. I think most people think of 3 to 5 years. Some 1 year.
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