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Originally Posted by MooreBonds
My question would be if you plan on reinvesting the dividends from the Target Retirement/Wellesley, or if you will spend the cash.
If you're spending the dividends, then I don't see why you need to keep 16% in cash - 84% of your entire portfolio will be throwing off around 2-4% in dividends each year, so even if the market dives, I wouldn't expect the dividends to be impacted too much. That would require a lot less in cash reserves, and allow more of your nest egg to grow.
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Thanks for the comments. The 16% in cash is a hold over from the old buckets approach. I asked the question becuase I think I'm like many folks who after a few jobs have more accounts and funds than they know what to do with as they approcah retirement. I did some consolidation last year and moved as much as I could into a single firm and put it into a US stock index (40%), International index (40%), REIT (10%), Total Bond Index (20%). As I look towards ER I want to get a bit more conservative and throw off more dividends/income and just simplify things.
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