How many months of cash in your portfolio do you keep?

[audreyh1]

I agree, but it's all tied together. In your example I would wonder why they waited so long to retire or spend so little in retirement. In any event, one of the things I have learned here is that there are many valid approaches to financial matters, The other thing is how high my risk tolerance is compared to many others.

What if "they" retired at age 39?

Spend so little? Maybe they don't spend little. Maybe they spend quite a bit - far more than they ever did while working.

I suppose you could wonder why they don't spend more if their net worth is "so high" relative to their expenses. Maybe they will eventually spend more. They certainly know they have that option when something desired comes along. They have lots of flexibility which is a nice thing.

As more cash builds they are likely to spend or gift more of it.

 

[audreyh1]

Agree here. The cash builds up faster than we can spend it and its not something we need to have invested. For us, about 3 years worth of spending in cash is not that much, but provides a completely liquid source for emergencies, bigger expenditures, and market uncertainty.

Yep, we might be underspending withdrawals while the markets zoom higher, but if our retirement assets take a 30% hit, so will our income, and suddenly you're not underspending anymore but might need to tap into your cash reserves to make up the shortfall in income.