I would count bank cash as part of AA. If that bothers you...just realize you may want to adjust your target AA to something different than your 60/40.
For us, we have rental properties that provide about 40% of our annual spending. The rest we are covering for the time being with bank account and some minor handyman income I'm making. We have plenty in TIRAs, but we don't want to take out too much to lose the ACA subsidy for now...so we are "working the plan" to try to keep AGI low.
You seem to be thoughtful and are just having the typical jitters many have when going from building wealth to depleting it...hang in there and you'll be fine.
Another option if you're still worried...determine how much of your spending is truly discretionary (travel, hobbies, etc.) and then if you have a bad year...cut some of that budget for the next year. That's what we are doing...if we have a bad year, we skip the $12k international vacation the next year.
So far we've only had one bad year...this COVID year. No one wants a handyman in their house during this and some of our tenants have been unable to pay or pay very late. But, we've been lucky in that our spending has gone WAY down due to the pandemic. We cancelled our Carribean cruise ($7k), have saved a ton on not eating out (we averaged $1,200/mo on meals out...and are now only spending $400 more on groceries...so $800/mo savings). As a result, we're still taking the international trip next year!
Where's that "blow that dough" thread lol.
