Reply to Looks like I need 6.2M to retire

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Sequence if returns risk is why I will probably never feel comfortable retiring. I have enough to retire but not enough to retire into a prolonged down market.. [/quote]

My advisor has me keep two years worth of liquid funds outside of the market, so I would not have to tap in if there was a downturn.

They have not historically lasted that  long. [/quote]

There are a couple of issues with that advice. The future is unknown. If you think the future will be like the past, then a downturn can easily last 10 yrs. And your performance is almost guaranteed to take a hit by having money tied up in bonds or cash.

I'm not saying that you shouldn't invest in bonds (you probably should), but their is a downside to pretty much every strategy. Reducing your withdrawal rate to 3% or doing one of the variable strategies is what I'll probably end up doing.[/quote]

Obviously there is a downside to each strategy.  However, if you are approaching retirement, it is best to have a portion of your investments in cash/bonds/easily accessible and not likely to take a hit investments.  yes, you will miss out on gains if the market is positive.  Conversely, if the market goes down 10%+, those investments will remain steady/small gains.  
Given that MM/CDs/treasuries are likely to continue returning 3%+ for the foreseeable future, it would be silly currently not to hedge your bets and put the next 2 years (or more) into that category if that is your income (or will soon be).

just like if your kid is 16 and approaching college, you should not be 100% in stock funds.  Unless you can deal with loosing 30-40% of your 529 before they enter college.  That's why you move a portion to secure investments a few years before college and hedge your bets with 25-50% in the market still.

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