I agree with previous comments that this is an interesting topic. Thanks for bringing it up.
We have about 12 months in what I call our "contingency fund" (CF). This used to be our "emergency fund" but I'm semi-retired and DW is a few months away from retiring, so all of our future cash will be included in this fund and contingency fits better than emergency. The CF consists of a PMMF @ Vanguard, checking account and the cash value of some old LI policies that are no longer needed.
I pulled the trigger on one of my DB pensions a few years ago and that goes into the CF each month. DW will pull the trigger on her pension in the summer of 2007.
The LI policies will be cashed in before the end of 2008.
In 2009 I will pull the trigger on my other DB pension.
2010 is the year that DW and I will pull the trigger on our SS benefits.
All of these income streams will be dumped into our CF as I have scheduled them. This should give us an income close to 100% of our expected expenses.
By 2014 I will have to begin RMD that will dump even more money into my CF. I will direct RMD money into our CF. RMD for DW starts in 2018.
Bottom line, if it all works out as I have planned (which it seldom does), we will be taking a lot of vacations just to make sure that the majority of our stash doesn't go to the kids. (We have told the kids to not expect much of an inheritance.)
Now all we have to do is live for another 40 years!