glasswave
Recycles dryer sheets
Newbie, and perhaps stupid, question.
I don't know if I am phrasing this correctly. But if one wants to keep most of their "retirement savings in index funds," supplemented by enough "low-risk/reasonably liquid investment/savings" so that if there is a market downturn, they can not touch their retirement savings in index funds and use their "low-risk investment/savings" to cover their spending needs until the market and their "retirement savings in index funds" recovers, then start rebuilding the buffer in their "low-risk investment/savings."
How many years worth of spending expenses should one have stashed away in their "low-risk investment/savings" to cover most any statistically likely market downturn?
Is there a rule-of-thumb/formula for this? Is this a viable strategy? Is there a name for this sort of strategy?
~~~~~~
I don't know if I am phrasing this correctly. But if one wants to keep most of their "retirement savings in index funds," supplemented by enough "low-risk/reasonably liquid investment/savings" so that if there is a market downturn, they can not touch their retirement savings in index funds and use their "low-risk investment/savings" to cover their spending needs until the market and their "retirement savings in index funds" recovers, then start rebuilding the buffer in their "low-risk investment/savings."
How many years worth of spending expenses should one have stashed away in their "low-risk investment/savings" to cover most any statistically likely market downturn?
Is there a rule-of-thumb/formula for this? Is this a viable strategy? Is there a name for this sort of strategy?
~~~~~~