▲ 16 r/Fire
Dividend payouts for VTI and BND type funds seem'd to stay relatively stable during the dotcom and 2008 crash, wondering if you need less 'cash on hand' to supplement during down periods?
Assuming you are spending your dividends instead of reinvesting, since you're retired and now need income, during normal times you're actually only withdrawing ~2% of your portfolio (sometimes more, sometimes less).
During these down periods, it seems like these divdend payout's stayed relatively the same? BND type funds during 2000 crash actually went up. VTI type funds slightly down.
- For those keeping a year's 'cash on hand' (in a MM) to supplement these times, wouldn't that actually be able to last you 2 years because half your income is still being provided by dividends?
- Not touching your principle is the key.
- I know this is psychological, but even in normal times, I feel like it gives me confidence in the 4% rule knowing i'm only selling such a small amount of my base principle each year.
u/Tk_Da_Prez — 8 hours ago