I didn't want to hijack rec7s thread, but when everyone is counting months, is that based on income per month, or actual expenses? Like BCG, I expect my income from pensions and SS to easily exceed expenses, but the excess will be used for after tax investing and discretionary spending, which I expect to be all over the place, depending on travel plans etc. So is most everyone using a years total expenses, including discretionary and dividing by 12, or simply using whatever their expected "income" per month is supposed to be?
That is one of theings I find difficult gleaning from the FIREed people here. So many are retired and live off of just their investments, others have pensions and investments, others still pensions, SS and investments, so while I know the bottom line is more in than out, I find it hard to wrap my head around a fixed income EQUALLY for all those scenarios.
After all, someone that is living of just investments and didn't need any more than dividends provided, would just not sell anything, and if they needed small amounts, use their cash bucket. During great bulls they sell equities to rebalance and refill as needed. I haven't read yet of anyone that has lived a few years of down markets, where they rode out the equities and cashed bonds for income, though the strategy is bandied about often. During those times, it would be instinctual to tighten the belt and reduce expenses so now the monthly income is reduced.
Does this make sense?
That is one of theings I find difficult gleaning from the FIREed people here. So many are retired and live off of just their investments, others have pensions and investments, others still pensions, SS and investments, so while I know the bottom line is more in than out, I find it hard to wrap my head around a fixed income EQUALLY for all those scenarios.
After all, someone that is living of just investments and didn't need any more than dividends provided, would just not sell anything, and if they needed small amounts, use their cash bucket. During great bulls they sell equities to rebalance and refill as needed. I haven't read yet of anyone that has lived a few years of down markets, where they rode out the equities and cashed bonds for income, though the strategy is bandied about often. During those times, it would be instinctual to tighten the belt and reduce expenses so now the monthly income is reduced.
Does this make sense?