While still a few yrs from RE, I wonder where I will fall on this. Intellectually, I would think if you believe in your AA then your once/twice a yr rebalancing would produce your needed funds for the coming yr. OTOH, I see where the defensive gene will start to potentially override some of this by playing "what if" mind games... what if the market craps out for 2, 5, 7 yrs? I suppose this is where we start to argue with ourselves that we should create a 2 - 7 yr cash balance to buffer a market collapse? However, unless this was part of your real AA plan, the larger the cash balance being held, the more you potentially negatively affect your long term planned returns. So here are my questions, particularly for those that hold more than 2 yrs in cash... How/when are you replenishing the current yrs cash you are spending? In other words, if you are a 2 yr guy you are spending now 1 of those yrs worth of cash. At the end of 2017 do you rebalance and replenish the 2 yr balance regardless of market performance or do you make a personal judgement of letting your securities ride and spend the 2nd yr of cash? Of course, if you did the ladder, you are now potentially creating the anxiety that I would think you were trying to avoid by keeping the cash balance. Curious as to how those of you who practice keeping a balance in RE actually implement your use/replenish of the cash.