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Old 05-08-2010, 10:15 AM   #21
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Originally Posted by Gotadimple View Post
How many times during the year do you plan on re-balancing?

What threshold would you use to signal re-balancing and which assets are out of balance?

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I plan on rebalancing once a year, unless things get too out of whack.

My threshold is when the assets are more than 5% away from my target allocations.

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Old 05-08-2010, 10:42 AM   #22
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Originally Posted by easysurfer View Post
I plan on rebalancing once a year, unless things get too out of whack.

My threshold is when the assets are more than 5% away from my target allocations.

Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
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Old 05-08-2010, 11:01 AM   #23
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Originally Posted by ksr View Post
This question is for those of you who specifically allocate a "cash bucket" in your AA to cover a specified number of years. Do you factor in expected dividends and interest each year?
I maintain a target of 3-4 years in my retirement cash bucket, which also includes 15% assumed taxes due (since the majority of my holdings are tax-deferred). I withdraw my budget amount each month, and pay the taxes at that time (via VG/Fidelity). In early December, I get the latest TT version and run my taxes for the year. Depending on the result, I'll change my tax withdrawn for December (usually I'm a bit over, so I don't need to take out as much tax in my December "income").

I'm fairly anal when it comes to budget tracking (forecast vs. actual) so it's not a difficult exercise to determine how many months/years of income I actually have at any point in time.

I don't factor in dividends/interest from other holdings, since I'm a total return investor. When a fund rises up above a defined pre-determined set point, I'll sell the "excess" and add it to cash (not in less than $5K amounts) if need be.

Sales are not made only from equity, but also bond holdings to ensure I can keep my current AA target.

FWIW, I do include my cash bucket within the bond portion of my AA. At this time (early retirement years, with no SS or pension income) the actual dollar amount is quite high. If I would remove it from my AA, this would result in an "imbalance" and would lower my equity holdings (e.g. I would be selling off equity holdings to get a higher bond portion). Also, looking at the cash bucket in addition to my total bond holdings gives me a long term view of possible income from fairly "safe" holdings (e.g. not equity funds).

As other income streams come on-line over the next eight years (till I draw spousal SS at age 66 and my SS at age 70) the amount of cash actually held will be greatly reduced.

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