[‎‎‎‎‎‎‎‎‎USER]

Looking for advice on drawdown strategies. Lets say that you plan to draw down a 60/40 portfolio and your safe withdrawal rate is 4%.

Assume that I also have 2-3 years in cash in case markets are REALLY down.

Assume this portfolio and the cash are my only sources of income (no rentals, SS, etc).

Do you:
A) Sell/withdraw 4% on Jan 1 and move to cash so that is your money for the year?

B) Sell/withdraw monthly and take the cash for just that month?

C) Sell/withdraw when the market spikes and “harvest” the gains and lock them in to cover the next N months?

D) Other?

I am leaning towards A because it takes the emotion out of it and I don’t try to time the market.

And if the market is down, I can always move to the cash bucket until markets recover.

[Eric]

I know it’s not your question, but why have a 60/40 portfolio? Bonds haven’t performed well or been safe for a long time and that is unlikely to change soon.

[Schm]

We are retired 6 years. What has worked well for us is:
2019 we were 65/35, equity/annuity.

2025 we are now 80/20 so this year we are buying a TIPS ladder which will rebalance us to 60/40 and more than cover RMDs that start in 2026.

[Popo]

Consider doing a Roth conversion early in the year on funds you’ll need in Q3 and Q4 so it can grow tax free and you can drawdown late in the year when you have a better picture of your income and tax obligation.

Drawing from the Roth in Q4 is quite helpful for staying in a low tax bracket and possibly paying zero on capital gains.

[Anthony]

I like taking 1.33% of the portfolio every 4 months.
Capture some of the upside in the market if any help flatten out the risk.

[John]

Plan A – Jan 1st market is at all time high. Take 12 months out.

Plan B – Jan 1st market is way down, take monthly payments.

Plan C – Jan 1st Markets are 2-5% down take the full 12 months out so you do not have to feel like you are timing the market.

Set up a plan and follow it so you do not have the anxiety. Keep it flexible.

I am not at the draw down stage so I am very interested in this question.

[Author]

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