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...We have $500,000 to invest.

What is a very simple investment and withdrawal idea.
I like ETF's but would not want many different ones nor switching.

One idea I have seen was to put 85% into SPY and 15% short term money market.

Withdraw 4% from SPY in good years and use some of the 15% MM in bad years.

I am familiar with the well known 4% idea.

Hi ww4321!

If you investing goal is to generate extra money to spend ( implied from what you said ), why not invest it in A-AAA balance sheet, dividend payers/growers ( i.e. JNJ, for example )? Even at today's somewhat inflated prices ( IMHO ), you could generate 3-4% in dividends that would grow enough to offset inflation. A maximum of 5% in any one stock and maybe no more than 15% in any one sector....say 20-25 stocks lower risk of any one company severely hurting your returns. If you don't want to go to the trouble of managing your portfolio, there are funds and ETF's that specialize in this area.

So long as the dividend stream is sufficient for your needs, then the vagaries of the market ( and individual stock prices ) fades into the background. If you aim to spend all the principal as well, simply add a conservative principal withdrawal amount on top of the dividend stream at the end of each year, dependent upon the results for the prior year.

Simplistic? Maybe....but unless you are into trying to "maximize your returns", it makes for low maintenance strategy to generate extra funds, without getting ravaged by inflation/interest rate increases, as one would in bonds.

Just my $.02

My own approach to retirement planning/investing ( different age; somewhat different goals ):

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