Can the Bucket Strategy Eliminate Sequence of Returns Risk? 

You are absolutely correct Rob. The bucket strategy is way more complicated than it needs to be. Simply rebalancing is the most efficient and best way to invest and then have emergency/short term cash available. Also, far too many people think they are safe by putting all their money into one investment like the S&P 500 which simply isn't diversified enough. Even if you have a couple of years of cash, that is a risky approach and Bengen's study shows this.

The “Tools” Rob has made available on his website (and will add to) is terrific. Thanks Rob!

Thank you for thinking this through and sharing!

Bravo. Excellent video. clear and concise.

Rob, thanks for sharing this clear and helpful content!

Excellent information. Thank you.

Excellent as usual. Got some sequence of hair brushing issues today, though. I would rank the options as follows: (1) liability matching portfolio, at least for safety-first folks; (2) Rob's total return + rebalancing; (3) bucket strategy.

Rob is excellent. So many years of helpful insight. Thank you

If both bonds and stocks are down why refill the cash bucket at year end? Isn't the 3 years in cash there to ride out a 2 or 3 year downturn if needed?

Glad Bill asked this question as I am in my first year of retirement at the age of 60, and sequence of return risk is one of my primary worries. Your overview was really helpful and insightful! Also, I appreciate the additional explanation with FI Calc. I have used the tool a great deal but some of the strategy explanations were lacking so your comments provided needed perspective. Thank you!

I agree with you 100%

The beauty of the bucket strategy is that it's easy to shift around, just as you stated, to make it work for you. But I also only think it's important for the reason you stated earlier - it's especially useful for the first ~10 years of retirement. After that unless you have a market crash I think it's not necessary to worry about it. Our plan has the two or three buckets only for those years for protection and I like it because it makes the most sense TO ME. One size does not fit all.

Thanks Howard

The problem is that you have to be REALLY committed to rebalancing if you are following a total return withdrawal strategy (i.e., Bill Bengen's 4% fixed withdrawal approach). In 2009 when stocks were down close to 50%, it required a lot of conviction to re-allocate back to something that got so crushed. The bucket strategy is mostly a behavioral crutch, but folks like Fritz Gilbert (Retirement Manifesto blog) make it work.

Rob, I "have" loved the bucket strategy "until" I saw this video. This example of a bucket for cash, and a % of bonds/stocks for the other bucket (depending on an individual''s factors) hits home with me. Thank you much for this video.

Thank you so much!

Great explanation Rob! KISS always works out the best!

Ramsey was clearly talking about "Percentage of Portfolio" strategy. The strategy of "on the day you retire, memorize the amount of your nest egg, then take X% of that amount and then every year increase that amount by inflation". Everyone thinks that not reacting to market returns is foolish and can lead to bankruptcy. So we should take an overly complex algorithm and make it more complicated by adding guard-rails and magic thresholds (yuck). As you say just Percent of Portfolio is interesting, especially as it is very very simple. You just take out 8% of your nest egg every year, so a 20% drop in the market reduces your income 20%. Some would say that is baaaaddd, .... but you should adjust your spending immediately upon bad news. The biggest advantage of this scheme is that you will never run out of money, but you may suffer through that lean years until the market recovers. In reality this works if you have some discretionary expenses over and above your necessary expenses. Why don't more people talk about this 'Yale' approach?

My current overall strategy: In pre-tax accounts (traditional IRA, rollover IRA, pre-tax 401k) buy two types of investments: (1) a TIPS ladder to cover necessary expenses that go up and down with inflation, and (2) a bond ladder to cover necessary expenses that don't track well with TIPS (e.g. property tax in California is capped at 2%, medical cost inflation is typically much higher than a TIPS ladder would cover). In Roth accounts, invest 100% in an S&P 500 index fund to cover nice-to-haves and big purchases that, if the stock market goes down, I can hold off on buying. There are some more nuances, like if my bond ladder produces more interest than needed in a year AND I can withdraw those funds at a low tax rate, then I will withdraw those funds and use them for a contribution to a Roth IRA (contributions can be withdrawn immediately at any age, conversions require a 5 year wait EVEN if you are over 59 1/2).

Love your content. Keep it coming

Very persuasive! So, the endowment approach for the bare necessities, using a 10-year TIPS bond ladder so you know exactly how much you’re getting and exactly when. That’s maybe 20% of your portfolio. Then the rest with the rebalancing strategy.

Thanks for going through this. It was very helpful.

Rob, thanks for the breakdown on this. Did you do a video before about the endowment strategy for withdraws? I thought you did. I looked for it a few days ago but I couldn't find it.

Your analysis makes a ton of sense.

Very good summary of the various approaches.

Excellent video!. One question I always have with regard to rebalancing is how it plays when you also want to maintain your asset location. For example, if most of your bonds are in a Trad IRA and you want to use them to buy stocks in a down year, buying the stocks in the Trad IRA changes your asset location, which can also affect you in the future by increasing your RMDs, taxable SS, etc. Would be great if you can make a video on this topic of rebalancing combined with asset location. Thank you for all your great videos and tools!

One issue involves pretax retirement accounts. RMDs don't make exceptions to market swings so it may be a challenge to restore your balance depending on when you withdraw and when the market is up or down. It only considers your age and your current portfolio balance. If there were a multi year span with a bad market year, a short term bull market for less than 6 months then another bear market your RMD formula would increase your withdrawal of your remaining portfolio balance. Bucket strategy seems like a feasible option. Rebalance depends on the frequency to eliminate sequence of returns.

1st off , Thank you for all the context you put out. Been watching for a little while now and really enjoy watching your stuff. . I wanna say I have been somewhat fortunate in my career with my 401k and now my IRA. with around 400,000 in a brokerage account and by the end of the year around 1.6 in 401k/ira I’m probably retiring 1-1-25. I have a CFP handling my money at this point and I’m constantly running FI Calc ( got that program from u )to make sure I don’t run out of money. In your opinion can I take 5 pct for the 1st 10 years , go to 4 pct ( or RMDS) the next 10 and get to 3 pct starting at 80 ? I am 62 end of year and I figured out I need around 100k. For the 1st 10 years and the drop for sure after that.

I have been looking at the bucket methods but its coming up with rules for pulling from bucket 3 that have me stumped right now. It easy as long as the market goes up and even initial when the market falls but when do you start to refill. I have asked a couple of people that use it but its seems they you their instinct to know when to start refilling from bucket 3. I am thinking of doing a little time segmentation. I am 58 now looking to retire around 62. I want to delay SS until 70 for me and maybe 65 or 67 for the wife. I was thinking set up a bond ladder for the amount of social security before claiming and then use total return with the rest of the funds is that a reasonable approach. Is this bucket approach or more of a time segmentation approach.

Rob great video as always, I see a lot of vids on retired investing and withdraws to cover expenses, I would love to see your thoughts on a retired person who has a pension and SSI that covers all expenses plus some. in my case I have cash invested in a T bill ladder, and a new IRA rollover at Fidelity currently 1Mil sitting in money market , trying to decide on an allocation moving forward. Thanks

Thanks Rob. I plan to factor in actual spending habits of GoGo, SloGo and NoGo, where I'll average 5-6% during GoGo, go down to 2-3% during SloGo, and up to 4-5% for end of life care. I have a lot I want to do during my early years of retirement, and I see how folks slow down and don't want to do anything in their 70s. Why would I want to sacrifice GoGo experiences just to have too much money while eating Cheerios and watching Weather Channel?

Suggestion for future Video: I always struggle a bit with the "survival percentage" approach to withdrawal strategies. A key element missing for me is how the chance of failure is distributed over time: Sure a 10% chance to fail in year 5 of retirement is much worse than a 15% chance to fail in year 32. But this dimension seems to miss from a lot of the discussion. e.g. bonds-heavy allocations have low chance to fail early in retirement but are almost guaranteed to fail over long enough time horizons, etc.. Would love to hear your thoughts on this how to manage this tension between avoiding early failure vs. ensuring long-time viability

I like the flat percentage of portfolio strategy, so long as your fund is of a size that covers your expenses even during very bad years. One of my goals is to leave as much as possible to heirs, and that strategy leaves the most.

How do you approach varying needs in retirement? Social security kicks in, you pay off a mortgage for example. Sometimes your needed money drops way down and starting at a 4% withdrawal rate leaves people working longer than they need to.

One thing I'm thinking is why not keep 100% in stocks throughout the duration of your life, including retirement. Especially before retirement. I have a higher risk tolerance I guess. Although not enough risk tolerance to pick single stocks, just s&p 500.

Hi Rob, great stuff. I did get a bit confused after you walked through the orthodox Bucket Strategy concept, suggested it was complex due to rules application, and then offered the 3 year cash / 7 year bond / rest in stocks simpler approach. Then you finished with saying you really don't like the bucket strategy. To be clear, were you negating your own alternate to the strategy as well?

Another great discussion Rob. I appreciate all the time and effort you put into your channel and thank you for all you are doing to share your knowledge and insights with us. Larry, Central Valley, Ca.

Thanks Rob. It turns out, developing a withdrawal strategy does not need to be overly complicated.

THere is no absolute. It can't ELIMINATE the risk, however, it can help alleviate it unless the length exceeds your allotted bucket for spending and you are still forced to liquidate market invested assets at an inopportune time. By having money out of the market to use for expenses (all expenses both base and discretionary), it also gives you the mental piece of mind to not kneejerk money out of the market by selling immediately during negative return cycles. Not perfect, but I've found it to be helpful.

Good content. Personally i agree with you, a fixed constant withdrawal with inflation adjustment , and rebalancing just between bond and stock only may be the best. And this can be automated , I assumed. My logic is yes we can plan all we want with different complicated strategies when we are still young and of feeble mind. But what happens when we become too old , fearful of more advanced technology or ways to do things or have undiagnosed dementia? I suppose a trusted executor plan to be in place and who knows and understands our withdrawal strategies, and I am very doubtful. So in much senior years, a much simpler method or a paid CFA to handle my be a good options?

Great tool box - and relevant video on managing sequence of return risks. I do - maybe falsely - not think we will have a 1920's or 1970's high inflation situation once again. The reason is that national banks manged the financial crisis and covid really well. There were mistakes at the outset of the financial crisis (especially by the FED in the USA), but in reality it was just a bump in the longer term due to the intense inter-governmental coordination that happened. Not saying we will see great future market returns - only that multi-year economic downturns seem less likely to happen today (stats support this). This of course does not negate very negative short term market returns as those are not closely linked with the real economy but expectations. Only that the time lines for economic crisis have very likely become shorter. A macro-economic reason for this is that global savings today are much, much larger than ever before - so there's more capital to work through a crisis - which we clearly saw during covid.

I wonder if there's a way to combine e them all. Rebalancing by percentage (4%), bucket strategy, guardrails? I bet that would look real complex. You were trying a bit of that in the end, and it already was getting a bit hard.

Curious what you think about LTC plans. They seem like a rip off and nearly impossible to execute when the time comes. Would you consider using inflation protected TIPS and self-covering your LTC expenses with today's dollars???

There are some that have demonstrated that if the "bad" year just happens to occur in the 1st year of retirement that can be enough to cause concern regardless if markets recover in year 2. So, doesn't have to be multiple bad years strung together.

My buckets are the following brokerage accounts: taxable/personal, IRA compatible, Roth compatible. What I plan to do is assign risk and percentage of liquidity for each bucket and adjust according to market conditions. For example, when building your buckets in your 20's and 30's, you could be 90% stocks and 10% bonds with zero liquidity. As I get closer to retirement, I'm slowly lowering the risk and increasing the ease of liquidity in each bucket. My taxable account (cash) will only have low risk investments (like Treasuries) that can be quickly liquidated. My IRA compatible account will be allowed more risk (60/40 mix) until I am ready for withdrawals. My Roth compatible account can remain fairly high risk (80/20 mix) until I am ready to take Social Security.

I love the rebalancing strategy. I always place 1 year in cash as part of the annual portfolio rebalance.

Rob, thanks so much for your excellent videos. One thing I have never heard anyone say is, when both bonds and stocks are down and you rebalance, such as 2022, you still need to withdrawal your annual amount from a depreciated asset. I read a book a few years ago called level 3 Investing that recommended 4 years of cash for such an event and then replenish your cash account on good stock return years. I think the rational was most bear markets last 2.8 years and return to pre bear market levels in 4 years. What are your thoughts on this strategy? I believe there were two bear markets, 73-74 and 08-09 that lasted more the 4 years, so obviously no system is perfect. I just always hear people say rebalance but never talk about which account, bonds or stocks, to take from when they are both down. This assumes you are not getting any other sources of income like a pension or SS at the time. This is my situation. Everything is in my 401 K until I decide when to take SS, so regardless of market conditions, I will need to withdraw my annual amount.

Rob, what are your thoughts on a portfolio that is rebalanced annually into 60% stocks, 36% bonds, and 4% cash at a constant dollar inflation adjusted withdrawal with initial income being 3.5%? Playing around in FI Calc this portfolio shows 100% success rate in 30 and 35 year retirements with 17.06% and 5.99% of the initial portfolio being the lowest final year value. 44% of the time you end up with a portfolio that is more than 100% larger than the initial value. This is basically the path I am following for my wife and I in our planning; once 3.5% of the portfolio covers our goal income (current goal is 100% replacement) we consider ourselves financially prepared for retirement.

Many financial experts say that one of the biggest risks for individual investors is making a poor decisions when there has been a significant market decline (panic selling or other psychologically influenced decision) especially when someone retires. It is easy to say don't sell or don't panic but during a prolonged downturn like in 2008, but in reality people can react and make poor decisions. Whether you use a bucket strategy or you design your portfolio based on time segmented spending, it can provide a retiree more confidence in their plan and to not make irrational decisions during significant downturns. It is easy to say that you would buy more stock if the market was down 40%-50% but in reality there are few people that have that much conviction unless you have a large portfolio to begin with or are many years from retirement. The other major risk is inflation which is why you need a healthy amount of diversified stock investments (ETFs or mutual funds) to help outpace inflation.

Buckets are just a way to choose amounts to allocate across asset classes and result in rebalancing "as usual". its clearly helpful to some but unnecessarily complex when its time to "fill buckets" i.e. rebalance. I did a video on my channel showing the math behind in via google sheets. Buckets = Rebalancing.

How bout a video on the bare bell strategy?

One of the "features" of the 3-bucket strategy is that retirees gradually get less and less exposed to stocks over time as the X years of bonds becomes a bigger and bigger proportion of their remaining assets. Do you have a view on whether the stock/bond split in your re-balancing approach (or the original 2-bucket strategy) should or should not be revised over time? At its most extreme, one could see a situation where a retiree in the later years has money they expect to spend in 3-4 years' time invested in stocks.

This is what I have been doing (just a bucket or two of cash for living off off, including home repair and bigger surprise and unexpected expenses year to year along with - bonds and stocks being managed as needed as the long term engine) but, I always struggle with the cash investment account portion of my savings for rebalancing and getting money out of it to live on without incurring next level tax impact (mostly taxes where I am). I wish the SEC/IRS or whoever it is would let retirees and disabled rebalance say, up to 500,000 in taxable account as long as it stayed there (but rebalancable) and withdraw was only used to feed into a designated cash account for expenses. Could be into an ABLE account for disabled people. Maybe also as long as your entire stock and bond investments were worth than 2 million. Something like that. :)

Regarding the percentage reallocation of the buckets scheme, wouldn't you keep the Cash portion at 3 years of inflation adjusted spending, not 15% of portfolio? So, the Bond portion would be set to 41% (= 350/850) & Stock portion be set to 59% (=500/850) . In your example, assuming 0% inflation, that would suggest in year 2, you'd make the Cash portion whole at $150k. The remaining $750k would be apportioned into $309k (=41% of (350 + 400)) for Bonds and $441k (=59% of (350 + 400)) for Stocks.

A properly designed bucket strategy will have you spending interest and principal from bucket #1 ,while you give bucket #2 time to grow to refill b1. Combined income between b1 and b2 should be 12 to 15 years .This will buy you the time for b3 to grow and survive a bad sequence . By this point you are 12 to 15 years into retirement and can safely switch into a Wellington type fund for the remainder of your life And to Rob,s concern of buying in a down market there is no rule that say,s you cannot use procedes from b1 and b2 as dry powder.

The only way to protect or hedge against sequence of returns risk during the accumulation period is to save as much as possible at the beginning of the savings period. The only way to deal with sequence of returns risk in retirement is to have realistic expectations of future returns, understand where to best allocate for each asset class each year, and make reasonable distributions according to a well thought out plan.

According to FI Calc the median remaining portfolio doing it Dave Ramsey's way is $544,852.52, so not awful.

Rob, Strongly Disagree. Plan on retiring later this year. Plan on using Bucket Strategy. Only use cash bucket in bear/down market. Will continue to rebalance on a yearly basis. Plan on a 3 year cash bucket.

🎯 Key Takeaways for quick navigation: 00:00 *💡 Introduction and Understanding Sequence of Returns Risk* - Introduction of the video and a viewer's question about rebalancing to negotiate sequence of returns risk. - Clarification on sequence of returns risk using two hypothetical retirees. - Explanation of the negative effect that early bad market returns and high inflation during retirement could have on the retirement fund. 02:18 *📊 Demonstrating Sequence of Returns Risk on Financial Independence Calculator * - The creator visually demonstrates sequence of returns risk using a financial independence calculator. - Using an example of a $1 million portfolio with 100% stocks, the creator shows the risks associated with different stock market conditions and high inflation rates, using real data from 1966. 04:50 * 🛡️ Approaches to Addressing Sequence of Returns Risk* - The creator introduces different ways to address sequence of returns risk, including through a withdrawal strategy. - Detailed discussion on the 4% rule, showing that starting with a relatively low safe withdrawal rate is one way to deal with sequence of returns risk. - Explanation of the 'guardrails' approach, which adjusts the withdrawal rate based on changes in the portfolio's value, and the 'percentage of portfolio' approach, which involves withdrawing a set percentage of the portfolio each year. 09:52 *🔄 Combining Different Withdrawal Approaches* - The creator explains that an individual could combine the inflation adjustment approach and the guardrails approach, to strike a balance between necessary expenses and discretionary spending. - Overview of the Yale Endowment Approach, where both percentage of portfolio and inflation adjustments are used, adjusting spending based on whether the markets are performing well or poorly. 12:10 *💰 Bucket Strategy vs. Rebalancing * - Reiterating that the spending policy is crucial in managing sequence of returns risk. - Introduction of the bucket strategy, which allocates funds into 'buckets' for different spending categories (e.g. cash, bonds, stocks) based on years of expenses. - Discussion on how the bucket strategy can help manage risk in bad years, by filling up the cash bucket from the bonds or stocks buckets. 16:04 *📈 Example of Bucket Strategy in Down Market* - The creator gives an example of how the bucket strategy is implemented in a 'bad' year, based on assumptions of the portfolio's performance. - Explanation of how the bucket strategy remains effective in bad years; it provides a predictable cash flow by steadily refilling the cash bucket. 17:01 *🫂 Applying the Bucket Strategy * - Explanation on how the bucket strategy is implemented during unfavorable market years. - Discusses potential complications with the bucket strategy such as decision-making rules on how to replenish the buckets. - Maker debates the efficacy of the bucket strategy, mentioning that stocks may need to be purchased when their value is down, contrary to the bucket strategy. 20:28 *🔄 Comparing the Bucket Strategy to Rebalancing* - Maker states the preference for traditional percentage allocations and rebalancing over the bucket strategy, due to the added complexity of the latter. - He explains that traditional rebalancing methods make purchasing low easier, protecting from sequence of return risks. - He provides evidence from Michael Kitces' research confirming his stance that simple rebalancing provides as effective a solution as a bucket strategy but with less complexity. 22:19 *⚖️ Exploring Limitations and Variations of the Bucket Strategy * - Maker clarifies that while sequence of return risks can be mitigated, they can’t be completely eliminated. - Discussion around potential issues that come with implementing the three-bucket strategy. - Explanation of a modified bucket strategy involving a cash bucket and a percentage allocation of stocks and bonds. Made with HARPA AI

Rebalancing seems to fly in the face of the 'sell your losers and let your winners run' adage. Thoughts?

What happens if both stocks and bonds are both down like in 2022 ? Rebalance based on lose percentages.

There is a big difference between withdrawing money and spending what you withdraw. Maybe, during good market years, you withdraw more from your IRA compatible accounts and put that money into your cash bucket (which is a taxable brokerage account for me). I may only want to spend $50,000 in a given year, but I decide to withdraw $75,000 3 years in a row in a bull market. Then, during a market downturn, maybe I decide to withdraw less (or not at all for one year). Maybe I significantly lower my risk first before the market gets really bad so I can continue to withdraw a consistent amount and keep my total tax burden to 20% or less per year.

Has anyone done a study on how often you should rebalance? Yearly, quarterly, heck even weekly, etc

Question. If you are 50 with $4 million invested having 50% in etfs based on broad indexes (Dow, Spy, Nasdaq) and 50% money market. Is this $ enough to retire? I rent a 2 bedroom apartment, no debt, no kids. I also ask because I have slight back pain sitting at PC 8 hours a day. I wonder how long I can endure it. I anticipate 6% returns but the past 30 years seem like a rosey picture. Thanks.

I am still a little unclear how the cash level is calculated. Do you always have three years in it? Or is a rule needed that says if both stocks and bonds do not not reach the expected 8%/5%/yr increase respectively) then you transfer from cash to everyday checking account and let the cash level go down to 2 years and then to 1 year and then to nothing? If one of the other investments increases greater than the expected % then you sell that investment and replenish cash? And then rebalance?

Another great video Rob! My portfolio is essentially like your “bucket”, $1.3M: w/ 1 year of cash, 5 years of bonds and the balance in equities. The difference, or maybe it goes without saying is that my bonds are in a bond ladder timed to mature as I need the cash. In addition, My equities generate a good portion of dividends that I utilize for cash flow as well. I replenish the bonds from equities in up years; leave them alone in down years. The bear market recovery median being approximately 30 months seems to work for me. The last downturn took right at 23 months to recover. Your thoughts?

🤘

I’m about 50/50 cash and stock, I think I can make it with my bucket strategy. I have no bonds and over 5 percent on cash and yes Dave Ramsey is clueless about this subject and doesn’t even need the money that why

Essentially you recommend 2 buckets strategy: 3 years of cash and 60/40 portfolio with rebalancing

17:00 you simply don't fill up the cash bucket. You don't take the bonds until the cash bucket is empty. Your income from b2 and b3 continually flow to b1. No wonder you think buckets are too complicated.

Very simple solution. Buy enough physical real estate to live off the rent and invest the rest in good dividend stocks.

I understand we don't know what the future holds, but why are these disaster scenarios always so far in the past? Is the market improving over time?

An annuity is good insurance against sequence of returns risk, in my opinion.

Rob, I thought the point of X # of years of cash was to give you the ability to ride out a bear. So don't refill the cash bucket when market is down.

Idk how Dave can call himself a financial "expert" when he thinks stocks average get 12% / year and you can pull 8% each year

Who is rebalancing or moving buckets when the market is down? That’s insane. You can eliminate all risk by just using cash and not taking for anything else, those other buckets leave alone. 7 to 10 years cash will ride it all out and your buckets will fill up when the market goes up and you can bring your cash up as your other 2 buckets will fill the cash up.

And when a retiree’s brain fails, then what happens? This is great and simplistic approach for those that can, however.

I just bought a 10 year MYGA that pays 6% guaranteed.. and I have the option to take out interest each year if I need it, or let it compound. In years where my portfolio is down, then I take out the interest to live on. Sequence of Return Risk is Dollar Cost Averaging- in Reverse. Wade Pfau would suggest you have your house paid off, and use it as a bank in yrs the market is down.. either a HELOC or a Reverse Mortgage.. pay off the balance in good years, Or have cash value life insurance to draw down on in down yrs.

I don’t know man as long as I am working my portfolio will be 100% S&P500 and I’ll take a safe withdrawal rate of 3% when I retire

Your % numbers don’t make sense. After 1st period your total portfolio is worth $850k, you moved $50k from bonds to cash and $25k from bonds to stocks Now you have $150k in cash(17% of $850k), $275k in bonds (32% of $850k) and $425k in stocks(50%of $850k) . How is this rebalancing? Your asset allocation is different from the start?

You assume that bonds aren't correlated with stocks. I think of bonds as stocks-lite.

Very interesting, but amateurs rebalancing their own retirement accounts every year during retirement, after taking distributions into account at the time of withdraw using a guardrail approach, seems like a path heading for disaster.

Sequence of returns risk is a large market downturn simultaneously as you withdraw from your portfolio as I undertake it. Why would anyone ever do that? Your assumptions should exclude this. I would set a moving stop on SPY at 5%. Never withdraw if stopped out. I would withdraw 5% if not stopped out that year in January. And live within my means. I think your focus on that topic is really an oddball example.

If you're underwater on bond funds, you really can't do rebalancing without incurring a loss. Maybe abandon portfolio rebalancing until it makes sense? Until then; maybe live off cash and stocks, take the interest income, if needed, from the bond funds? Otherwise bond funds should recover faster with reinvested income.

Rob, your math don't work. EOY 1 balance $850k ($100k/$350k/$400k). You say rebalance EOY 1 to 50% stock at $425k ($850k/2), replenish cash to $150k from bonds, leaves bonds at $300k, buy $25k stocks from bonds to make stocks 50% because you argued to buy more when stocks are low. My country math yields that this means cash $150k, bonds $275k, stocks $425k (total $850k), but buying $25k stocks from bonds to reach 50% of $850k in stocks means your bond allocation is now 32.35% not 35%, or is my country schoolhouse math wrong?

Guaranteed Income Sources: Utilizing guaranteed income sources such as annuities or pensions can provide a steady stream of income, reducing reliance on portfolio withdrawals during market downturns.

I took early retirement in 2017 from the federal reserve bank and this is the primary reason why I stay away from relying on selling shares to pay the bills. No thank you. I made $60K in dividends and $63K selling covered calls last year. My pension plus this income is more than sufficient for me to live on. No 4% rule here. 2000-2013 no thank you.

Like a bad penny, those buckets and flower pots just keep turning up. What is frustrating is that lots of people who ought to have appreciated Kitces's research years ago, and should know better by now (cough, cough, Morningstar), continue to promote and write about this kind of nonsense, along with dividend investing and other cutesy-named dalliances involving shields and ladders and hoses and other assorted gardening implements. Whatever happened to the plain old "belt and suspenders" anyway? But I suppose that will be the case as long as it attracts clicks and eyeballs and potential customers. Always gotta be closing with the cutesy labels and the bucket-of-the-month gardening clubs.

Wait until age 70 to take Social Security.

Ramsey doesn't say withdraw $80,000 per year adjusting for inflation. He says withdraw 8% of the portfolio value annually. I'm not necessarily agreeing with him, but there's a big difference. You're comparing apples to bowling balls. And with his strategy you do get a 100% success rate, however small the final withdrawals may or may not be.

You can withdraw 8% a year as long as you don't spend it all lol.

Buy Single Premium Immediate Annuities. What Babe Ruth did before the Great Depression. (On advice from his agent.)

It is financial malpractice if you are not using Income Lab for a retirement spending plan now. Everything else is amateur hour.

this is all noise u could do this vid in two minutes,4-5 years of cash ,no worries about markets or sequence risk,seriously!!

What happens when there are multiple years of losses for both Bonds and stocks?🫣