Read? Three Years After Retiring From Full Time Monthly Salary As Employee (2)
Let it flows! Let it flows! Let it flows!
Don't bother with compounding growth as retiree! Enough is enough! Sustainable retirement income to ease emotional rides in volatile market.
Unrealized P/L in the portfolio is not Real; but realized cash flowing into Cash Reservoir is Real and cover future household expenses!
Every single cent flows into the Cash Reservoir and Uncle8888 has discovered this simple and practical strategy worked during COVID-19 crisis as retiree and likely to also work in future market cycles to avoid negative sequence of return risk.
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CW,
ReplyDelete1. Your "3 years after retiring" link not working...
2. Some things we can figure it out ourselves one right? Imagine old fogeys in our 60s still giving excuse "school never teach"...
Then again, I often see during my weekend sales gig, there are quite a few old fogey bei kambings who still ask sales people what shoe size they should wear!?
A bit sad. The older we get, the wiser we get - this would not apply to them... They are the Peter Pans; forever bei kambings.
Thank you for checking! Updated. Didn't practise this morning on your Trust but Verify! LOL!
DeleteUncle8888,
ReplyDelete"Stay rich" portfolio management in action. 👍
That's the bucket or cash shield method.
Complemented by your CPF and dividend stocks taps. 😉
For those who need to actually sell off a bit of their portfolio each year to fund their retirement e.g. low dividend yield stuff like US stocks & most ETFs, it's important to build up roughly 3 years' worth of household expenses before retiring.
During the first 3 yrs of retirement, draw down from this cash bucket.
After the first 3 years, then draw down from the main portfolio.
This will protect you from SOR risk if there's a big crash or big recession in the first 5 yrs of retirement e.g. GFC or dotcom recession.
There're other methods like bond tent (which Uncle8888 actually kinda implemented during Covid crash) but is harder to carry out.