That's the "3 bucket strategy", which has been totally debunked.

The intention of the cash portion in retirement is to avoid Sequence of Returns Risk (SORR).

There's a pretty good argument for a bucket strategy at

https://www.theretirementmanifesto.com/is-the-buck...

including some simulations.

This is what one of the author says:

"From my personal experience (having used The Bucket Strategy for the past 4+ years of my retirement in both a bull and bear market environment) it’s a sound strategy for the retiree who wants an easy-to-manage system for funding their retirement spending needs. Is it the optimal solution? According to Karsten, perhaps not from a strictly mathematical perspective. But, when combined with the ease of understanding and implementation, it becomes the winner in my book."

However, if you want to start your retirement with no cash buffer because you think the bucket strategy is nonsense, go right ahead. It's your money.

Mechanical Investing FAQ

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