steelyman
Moderator Emeritus
I am curious about others' (especially those who have already FIRE'd) opinions on how much of a cash cushion one should keep around to be as safe as possible once one takes the leap.
I'm not talking about an emergency fund here, which I view as an easily-tapped resource for things like unexpected repairs, expenses, and so on. That's separate.
I am about 85% to a goal of having three years worth of cash that I know I will start needing in about six years. My plan is to draw from that at that time, and replenish annually to keep the three year cushion intact.
The rest is all allocated according to an AA strategy amongst the usual: stocks, bonds, etc. With a three-year backdrop, I think one can be a little more aggressive on these other assets.
So right now, I might seem to be a little cautious on the cash side, but really it's when the time comes to start doing the withdrawals that I am targeting. I am thinking/hoping that three years is long enough to weather most market downturns (although not all, that's the gamble).
I'm not talking about an emergency fund here, which I view as an easily-tapped resource for things like unexpected repairs, expenses, and so on. That's separate.
I am about 85% to a goal of having three years worth of cash that I know I will start needing in about six years. My plan is to draw from that at that time, and replenish annually to keep the three year cushion intact.
The rest is all allocated according to an AA strategy amongst the usual: stocks, bonds, etc. With a three-year backdrop, I think one can be a little more aggressive on these other assets.
So right now, I might seem to be a little cautious on the cash side, but really it's when the time comes to start doing the withdrawals that I am targeting. I am thinking/hoping that three years is long enough to weather most market downturns (although not all, that's the gamble).