The post above seems like a much simpler way of phrasing what you're doing than your first post on this thread.HomerJ wrote: ↑Fri Jul 30, 2021 10:34 am
Yeah, after I retire, I'll pay all bills using cash/CD/bonds money up until I get back to 50/50.
So I'll drop off 50/50 for this year or two before retirement, then slowly get back to 50/50, and then stick there all through retirement.
The plan after I'm back to 50/50, is that every year in retirement, I'd pull from the side that has more money. If stocks went up that year, I'd pull from stocks. If stocks dropped, I'd pull from bonds.
Basically, you're adjusting your asset allocation now to be a bit more conservative than 50/50 since your portfolio is a bit bigger (due to recent stock gains) than your goal and you are close to retirement. And if it keeps growing, you'll continue to make it a bit more conservative for a while.
And then after you retire, you'll use your spending to gradually drift you back towards 50/50.
And I'm guessing if stocks perform well enough to take you past 50% stocks at some point, and your spending isn't enough to bring them back down, you'll rebalance to 50/50 at that point. Or I guess you could spend more.
I'm no expert, though I'm very grateful for all I've learned from BH forums and books. But it sounds fine to me to reduce risk for a few years. You know you're giving up potential gains in exchange for reducing risk, and you understand about inflation risks, so you're making the decision with open eyes. Much better to do it now, while stocks are high, than wait until there's a drop and have to grit your teeth through it, wishing you'd reduced risk when you could.