Originally Posted by mpeirce
Our budget contains a number of items that are "nice to have", but we could certainly do without. So when the inevitable market down years happen, we'll cut back on things like travel.
Just my $.02 cents on the "nice to have" or wants vs. needs way of budgeting while in retirement.
I/DW have always taken the position of not giving something up just because the market says we should.
That being the case, our retirement budget (we're both retired) does not break down by things we can give up if things get bad.
How do we do that? Simply by having enough cash (in our case, 3-4 years of gross - includes taxes due on withdrawls) to overcome any down years in the market. BTW, when I retired (age 59), we both had 4-5 years in cash; however since we're close to additonal income sources (two small pensions and SS in less than a year), we've reduced our cash holdings.
I know a lot of folks on this forum budget in a "two phase" manner. We've taken the position of not having to do so, by ensuring a constant revenue stream over an extended period, regardless of what happens in the market.
Just an alternative way of doing things, from our POV.