As I work my way through my pre retirement checklist of to do’s a thought occurred to me. As far as the mechanics of paying bills in retirement is concerned, how much of your portfolio do you normally keep in cash? Is it a percent of your portfolio or is it a number of months of expenses? And how often do you convert investments to cash? Once a year? Quarterly? Monthly? Looking for input and direction in this regard. Thanks!
IMHO it is tempting to over-plan this kind of stuff. Like treating a SWR as if it is graven in stone and cannot be changed. There is also a common belief that our year-to-year spending will be level. Not so. To me, finances in retirement is a little like driving my car. As situations occur and as I see potholes or opportunities to coast, I deal with them. Like driving, I make small corrections as needed.
For cash, a small Megacorp pension ($800/month) plus Social Security almost but not quite handles my regular monthly expenses. A thousand$ or so a month plus cash for real estate taxes, income taxes, travel, etc. is the remaining need.
So when I need to top up the checking acount, I sell a few$K of equities or transfer a few $K when a t-bill matures. This happens maybe six times a year. The $K amount is a tiny blip on our AA, so I really don't worry about that.
As far as "cash" is concerned I never hold any significant amount. T-bills is about as close to cash as I get. Both DW and I have standby credit lines on our checking accounts so in the highly unlikely case where we immediately needed ten or twenty $K it is available to us that way rather than via an emergency sale of investment assets.
I would suggest that you ignore your question until you're retired. Then wing it for a year or so and the answer to your question, for your particular situation, will probably become clearer.