I don't think I still have the spreadsheet, but I looked at this once. A 1972 retiree using the PP with a 4% SWR and the 15-35 rebalancing bands would have rebalanced something like 8-10 times over the years (I don't remember the exact number). Less than half of those times would it have been because cash dropped below 15%, The rest were because stocks, gold, or LTTs all exceeded 35%.mathjak107 wrote: i think anyone spending down from the pp has to examine this and find away to provide a secondary source for spending without selling assets as volatile as stocks are .
A PP retiree typically turns off automatic reinvestment of dividends and interest and uses that first for expenses before selling assets. That usually does not completely cover expenses unless the portfolio is very large, but it definitely slows the rate of drawing down cash beyond what you'd initially think. And when it does sell volatile assets, it only sells the highest ones as part of a normal rebalance. I don't see that as a bad thing at all.
In any case, that's the academic method and there are other good ways to approach it. Personally, my PP drawdown method is sorta hybrid anyway. I first live off of the dividends and interest, which funds almost half of my needs. Each year, I rebalance as close to 4x25 as I can get while staying in the 0% tax bracket for capital gains and skim off enough in the process to cover the rest of my expenses. That's a free rebalance most years, with tax-free funds coming from appreciated assets rather than cash. In years where it is beneficial (like markets are struggling or there's a tax benefit to sitting tight) the cash is there to support me for years if necessary. Cash is just one tool of many in the arsenal. It just happens to be a highly flexible one.
The first hit is always free. Thanks for the donate button idea. I'll look into that.Cortopassi wrote: Been playing all night with Tyler's calculators (put a donate button up, I WILL donate!), and this 17/17/16/25/25 TSM/SCV/EM/LTT/Gold really is shining for me. I like the additional risk/reward of the stock split, while keeping my gold level to where I really like it (20-25%)