The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: pachipres on November 13, 2015, 03:53:25 PM
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Hi There,
My husband and I are getting ready to retire soon. He is working 60 hours a month at a contract that will be ending soon. We have 1.275 million and I have a question. I am not sure whether to build up a savings account (can likely add 3k to this each month until the contract ends) making less than 1 % or do I put it in the retirement portfolio of 1.275 million. In other words, should I have a savings account to dip into or just to withdraw from monthly until all this money is gone and then start our 3% withdrawal rate.
Hope I am making sense here.
Thank you very much.
Lorna
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Typically any money you will need in the short term (12 months) should be in savings and not where it's more volatile.
However with a 3% WR, I don't think it really matters. http://www.madfientist.com/safe-withdrawal-rate/
Personally, I plan to have the first year of retirement expenses in cash, saved during the few months before we quit.
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Thanks BackyarBQ for responding. Well, it will start at 3% but might have to go up to 4%. Thanks for letting me know you plan on keeping 12 months worth of expenses in savings. It is good to hear what others are doing.
Lorna