We've been doing this the past couple years and I'll explain why it made sense for us.
YMMV, but here goes...
I hope to ER from Megacorp late this year at age 55 when I will get my non-COLA pension - from a very stable company at which I've worked my whole 30-year IT career. 54YO DW could also ER at the end of this school year, with her non-COLA pension; but she may want to work a couple/few more years, which would increase her pension (tho that's not the reason; she likes the structure of a job, and teaching just two miles from home 180 days/yr and getting home at 2:30 isn't a bad gig). My pension provides a free 60% survivor benefit, but wife's is expensive (10% for 50% or 18% for 100%); so we'll likely forego hers. We'll probably buy term life policies for both of us before retiring to protect us til SS arrives.
Our house is paid off and we don't travel a lot or have expensive hobbies. Cars paid off too, but will need replacing in 3-5 years. Both kids out of college - DD married last summer and doing well, DS 6 months into his career and living with friends. Neither has student loan debt and both are committed to saving 10% of their incomes already toward retirement.
We're pretty sure we can mostly live off pensions (to start anyway, until inflation erodes them), with some portfolio withdrawals to fill the void of no COLAs until SS. At that point, pensions (even deflated), plus SS will put us higher than the day we retire.
Medical coverage: DW gets hers free for life once retired for having spent her entire career in the same state school system. I will get into my employee plan as a retiree, for less than $2k/yr.
So, that brings us to retirement savings... around $920k, mostly pretax. Up until our mid-late 40s, we were 100% stocks, then a few years at 80/20, then down to 70/30 til a couple years ago. As we neared ER, a little over a year ago, and wanted more to protect than grow our portfolio to not jeopardize ER, we shifted first to 60/30/10, then this past fall to 35/50/15 - as you and Jane suggested - to avoid a negative sequence of returns. I do realize that some advocate that with high stable income floors, we could instead take MORE risk with our portfolio. But we'd feel much worse losing money we need than gaining more that we really don't.
We've even gone a step further, tho some might call this market timing regarding the rather high 15% cash position. 5% of that can be used for the first few years of withdrawals when we need to start supplementing our deflating pensions without having to sell stocks or bonds if they happen to be down at that point. The other 10% is the "timing" part - to eventually put back into the market 3-5 years into retirement.
For us personally, our biggest ER financial fear is a negative sequence of returns because we likely won't even need to sell stocks or bonds the first few years of ER - so why risk starting off behind by having a large stock allocation? We opted to shift to a more conservative AA, and the market the last couple years seemed like a good point to sell some.
We have no crystal ball. And if the next big market drop comes in the next 3-5 years, we won't know exactly when to shift some back in. But we'll do our best and ultmately, we'll probably settle somewhere around 50/50 by age 60.
What we do know is that if the market drops a lot in the next few years, we now stand to lose a lot less during the crucial few years before and early into retirement. And given our high stable income floor, that just makes sense for us, even though we realize that if the market goes up, we'd miss out on some gains.
Sorry for the very long story, but this is an important issue to us and I found your JBQ negative sequence of returns reference very close to our hearts.
Thanks for listening.
