03-03-2021, 10:07 AM
(03-03-2021, 09:29 AM)ken-do-nim Wrote:I just did #3. Slowly accrued portfolio income for a two year supply off all the dividend income I planned to have. It's getting an annoyingly low interest rate, but I now have a two year buffer for market foolishness to work itself out. More often than not a recession isn't much longer than that.(03-03-2021, 08:55 AM)MikeWa Wrote: You shouldn’t account for only regular living expenses. Once in retirement, a healthy buffer in either cash reserve or additional income stream will be needed for emergencies. What if you need to replace a car or you or spouse gets sick and need a special treatment? There may be a need to cover long term care expenses in either a facility or by hiring nurse.
These costs will quickly drain your portfolio if they come from principal.
Great point. The ideal state is probably:
1) A dividend growth portfolio that takes care of 100% of your income needs (or if it doesn't, you also have say rent coming in)
2) A pure growth portfolio that is just allowed to grow, but can be tapped when the need arises
3) A healthy cash reserve