With a diverse asset allocation, domestic stock, bonds, foreign stocks, gold 25% weightings for instance, if you draw income from the most above target weighting then that is a form of partial rebalancing. 4% withdrawal from a 25% weighted asset = 4/25 = 17% of that asset being sold. The opposite for saving, add to the lowest below target weighting. You can start with 4x25% weightings and withdraw in that manner to still end up with similar weightings 30 years later without any additional rebalancing, overall outcomes/results also tend to be similar to that of having yearly rebalanced.
In practice you might rebalance (withdraw) monthly, 4%/12 = 0.33%/month rather than 4% once/year, again from whatever asset is the most above target weighting at the time.
Eliminates the emotions.
In practice you might rebalance (withdraw) monthly, 4%/12 = 0.33%/month rather than 4% once/year, again from whatever asset is the most above target weighting at the time.
Eliminates the emotions.
Statistics: Posted by ice212 — Wed Dec 03, 2025 12:44 am — Replies 102 — Views 10901