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Pixy asks,

As you well know, it's utterly ludicrous to think one must wait until a $250K pot is amassed prior to investing. Will that person have to take that $250K from savings within the next five years? Not likely, because that person will have wages from which the vast majority of needed income comes. OTOH, if that person intends to buy a home and will need $20K for a downpayment, then that $20K must be amassed outside of the stock market to ensure it's there when needed.

Or maybe that person is an early retiree, like you, who must live exclusively on income from savings (i.e., no Social Security, no pension, no job wages). If that's the case, and they need $50K per year to live on, then absolutely that person must have $250K NOT invested in stocks to cover the 5-year period of withdrawals from savings.

Why is it I suspicion you knew what my response would be before you even asked the question? Are you testing me or simply enjoying a slight bit of harassment to enliven an otherwise boring day? :-)

Not at all. Just thought that many youngsters would benefit from the clarification that the "5-year" rule only applies to those in (or near) retirement. Those more than 5 years from retirement may still want to be 100% invested.


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