This is what we do except we are not retired. We do this with the income from my wife's self-owned business. For example, for 2026 we take last year's income, move it to a MM account and then 1/12 to the checking account each month. Basically her paycheck each. As for previous year's income we know what we need from the company to pay for our needed expenses so we take that much from the company's previous year's profits. Anything over that is treated as a bonus and each year we sit down and decide what to do with it. Some years we save part of it, or use it for home improvements above what we were already planning, or whatever we decide. For 2026 we decided to fund a family vacation for ourselves and adult children along with their significant others. Truly the fruits of our labor and a chance to unit the family who is scattered around the globe.Thank you for your response. As I look at the approach, I wonder if it’s just not easier to take 5% of the portfolio once a year, put it into a money market fund, and send 1/12 th a checking account once a month.
I am not OP, but the way we function is that we have a quarterly spending account which as you guessed it covers 3 months of spending. At the end of each quarter I replenish that account. We have another account in which all our dividends and if I have any W2 income go into there. I use that money first to replenish the quarterly spending account, and then I sell stocks and/or bonds to replenish the rest.
What is nice about this strategy is that it is easy to keep a budget. At the end of the quarter any money left over I keep track of in a spreadsheet and it easily lets me know by how much we are under budget. Those funds are then used for the lumpy expenses that happen from time to time. I find it a very easy way to budget without needing to track very much.
Statistics: Posted by RetireWhen — Wed Jan 21, 2026 11:01 am — Replies 136 — Views 39268