“100 minus Age” is only a rule of thumb

your time horizon to be able to ride out market dips shortens.

your dependence on a stable cash flow increases.

It’s a very sound rule of thumb, but that’s just what it is — a rule of thumb or a broad generalisation which merely provides a starting point to planning one’s portfolio.

a) Inflation — cash flow requirement from investments would be 55 in year 1, but then increase every subsequent year owing to inflation. We planned for 5 years.

b) Buffers — taxes, unexpected expenses, extra liquidity.

Her equity allocation was almost 2x of what it would have otherwise been.



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