Originally Posted by Animorph
I didn't read the original, but it sounds from the quote like they're just using the withdrawals to rebalance. I think many of us would be rebalancing once a year or by a trigger when things got too far out of whack. Taking 6.5 years to rebalance is not the standard process. Of course I think plenty of people "forgot" to rebalance at all during 2008-2009.
Originally Posted by pb4uski
I don't think that many people here use only withdrawals to rebalance.
Normally I don't withdraw anything for spending but dividends. I rebalance once a year in January, taking the previous year's (cash) dividends for the coming year's spending. Also on rare occasion I do rebalance when my AA gets way out of balance due to market events. I did that in 2008-2009.
When I rebalance, I'm selling only the assets that are doing relatively well, to buy the assets that are doing relatively poorly. So, I'm not selling the assets that are doing the worst.
As an aside, I have intentionally set up separate, reliable income streams from various sources such as a tiny pension, social security (which I finally claimed last year), and the TSP "G Fund". The "G Fund" is a government bond fund guaranteed never to drop in share price, therefore providing me with a small but stable pension-like income. Now that I have SS, these three income streams will cover all or nearly all of my bare bones expenses if I ramp up the LBYM efforts. I would probably want to do that during a really bad market so that I could buy more shares using my dividend money, instead of using it to live on as I have been so far in retirement.
So far in retirement, the only time I have ever dipped into my principal was to cover the expenses of buying and moving into my new "dream home" before selling my old home. I simply would not have not moved had the market plunged at the wrong time. At times like that I would tell myself, "Tough beans, suck it up!"
Other than the move, I have never withdrawn principal but instead, just rebalance it.