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Your annual withdrawal rate should be 4%. Not 5%. From a portfolio of:
20% MMF
80% Vanguard Total Market Index Fund (Admiral shares have a TER=0.15%)

You SELL 5% of your stock fund's value once a year and add it to the MMF. (0.05*0.8=0.04 or 4%)

The rational for using 1/48 of the MMF's value for your monthly draw is this: since you're keeping 4 years (48 months) of living expenses in your MMF, using 1/48 at the begining of the year will smooth out your annual income. It will not jump around so much. In my case, I keep 6 years (72 months) of living expenses in cash so when I do my monthly income calculations for the year, I divide my cash by 72.
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