I debated on adding on to a previous thread I started, https://www.early-retirement.org/for...-109440-4.html
, but thought it might warrant it's own discussion.
While probably not enough to move the needle, I am doing some tweaking to perhaps how I shuffle my fixed allocation deck as I get ready to take my first withdrawal in 2022. Big picture, I am currently running with a 60/40 AA and will have a low 2% WR supporting a relatively large annual spend (significant discretionary spending). While I will probably stay primarily an annual AA rebalance guy, I am overlying a little "bucket-ish" lens on my first 10 years of spending. Also know, my current fixed allocation is a mix of cash (HYSA), intermediate and short term treasury ETFs, and some preferred ETFs. I do buy into the ballast theory as opposed to chasing yield with bond/CD ladders... but always open to exploring new mouse traps.
So here's my question... with inflation rearing it's head, does this fixed stack make sense for 10 years worth of spend...
1 - 2 years in cash (HYSA) - up to 2 years would ride out any smaller market blips and minimize need to sell any short term treasuries if inflation runs a little hot for 2 years.
3 - 4 years in short term treasuries - 2 years of cash allows enough time for the overall returns to recalibrate
5 - 10 years Intermediate - similar to above, but 5 years of cash/short term treasuries allows enough time for the overall returns to recalibrate
The "thought" here is I am giving my short term & intermediate term bond ETFs enough time to rebound over the respective periods before having to touch them, especially if inflation runs hot in the more immediate future.
Perhaps I'm a little anal here, but just looking to tighten the screws!