audreyh1
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I rebalance based on rebalancing bands, but it's rare that they get triggered since I also do a rebalance at the same time I take my withdrawal. End of year mutual fund distributions usually have my AA out of balance by Jan.Do you only rebalance once a year or based on rebalancing bands? If the latter, does the increase in cash in your portfolio due to dividends ever cause you to rebalance your portfolio during the year?
I don't track cash in my AA at this point (still accumulating), but I can see where it might be helpful to track a percentage in cash once in the withdrawal phase.
No, I don't count my accumulating cash from distributions in my rebalance equation so that doesn't trigger a rebalance. This is for the simple reason that most (if not all) of it will be withdrawn, and it doesn't make sense to reinvest it and then turn around and sell assets (incurring more taxes) to meet the annual withdrawal. I receive >80% of my distributions in Dec anyway, so Jan is close enough to do the withdrawal and rebalance.
But if we were to have a big market event during the year, it might trigger rebalancing, even ignoring the accumulated cash from distributions.
BTW I keep 5% in cash already as part of my retirement portfolio AA.
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