IMHO, if adding a cash buffer helps you sleep better at night during market crashes, one can still make an argument that this would be preferable to a more stressful portfolio that should theoretically return more. Mechanical back testing studies all assume that investors have the fortitude to stay the course even in the darkest market times. That's where many flesh and blood investors fall short.
Great point. In fact, the researchers from the study said something very similar in their conclusion [emphasis mine]:
"Although the results from this study show that a static asset allocation strategy is superior to a buffer zone strategy at minimizing longevity risk, the use of a buffer zone may be merited if it will impact one’s investment portfolio choice. To elaborate,
it may provide a psychological mechanism to induce clients to accept stock exposure. With the one exception of comparing a pure bond asset allocation to a bond and buffer zone strategy, it is clear that buffer zone strategies are much superior to a long-term bond portfolio strategy."
I guess it's easy for me to sit here in the accumulation phase with a job to cover my expenses and claim I would stick out a crash without flinching. But after ER, when my survival relied on that 'stache, fear that it might go down 50% in a year might make me make moves that are not completely rationally justified.