Iāve been thinking about something I donāt hear talked about enoughā¦ The strategy doesnāt end with investing. The exit matters too. Iām still about 7 years out from retirement, but I know I canāt wait until then to figure this part out. At some point, Iāll want 2ā3 years set aside so Iām not selling investments in a down market. That part feels pretty straightforward. What Iām working through now is this: If you had 2ā3 years of income sitting on the sideā¦ where would you put it? These are the options as I see them: ā¢ GIC ladder ā¢ Cash ETF / HISA ā¢ Bond ETF ā¢ Income funds Now itās just a matter of drilling into which one actually makes the most sense. What would you use?
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Crazy Canuck Investor @crazycanuckinvestor Ā· 4mo
There are only four days left to vote in this post. The results are shaping up to be much different than I thought Iāll definitely share them after the duration of the post ends But what do you think is leading this question?
RJ Fire@rj_fire Ā· 4moEdited
I thought about this for a long time. Like many people, I started from the traditional assumption that retirement means entering a ādecumulation phaseā ā holding a meaningful amount in cash (or other safe, liquid assets) so you can sell those instead of equities during downturns. I even hired a fee-only retirement advisor to map everything out ā highly recommend, by the way. That process was valuable, but it also made something clear: my DIY investing style and risk tolerance donāt really align with the idea of āstepping backā and managing my portfolio less actively just because I have more time and a clearer mind. For me, that felt like settling into a passive approach when Iām actually most capable of being engaged. So I landed on a different structure that fits me better: splitting the portfolio into two buckets ā growth and PII (Passive Income Investing). With this approach, I still keep a āwar chest,ā but itās much smaller. The reason is simple: the income stream does part of the heavy lifting. Yes, payouts can fluctuate, but if the PII sleeve is built with some defensive components, it continues to generate income even in tougher markets. That, in turn, reduces the need to sell assets month to month, lowers the anxiety of timing sales during downturns, and gives you real breathing room. And importantly ā this isnāt just theoretical. This yearās market ups and downs have been a real-world test, and so far, this structure has been holding up well and serving me as intended.
M @pantomimepotato Ā· 4moEdited
There is an argument to be made about staying invested in your standard allocation without maintaining a separate cash bucket: https://youtu.be/QGzgsSXdPjo?si=A7soBHWg1gl4O47B https://www.kitces.com/blog/are-retirement-bucket-strategies-an-asset-allocation-mirage/ A cash bucket is more of a mental crutch. Itās not the most optimal strategy, but if it helps you sleep better at night, it might be worth considering. In that case, I would personally consider the first three options (not the income funds). One thing that I think is worth pointing out is the discount short term bond ETF offered by BMO: $ZSDB. If youāre investing in a non registered account, thereās potential of higher after tax returns compared to a simple short term bond ETF. Justin Bender did some great videos on this topic. https://youtu.be/PxSgqkRrzXI?si=jRlcBpptci5JFP_j
Michael Conroy@conroy119 Ā· 4moEdited
Some sort of mix of the first 3. Your post and question is about "Cash". How on earth does a CC ETF fit into that? If you're expanding the criteria to something that is very far from "cash", then you can make a list of 10+ things. Like blue chip dividend stocks/etfs for example. Edit: or any equity etf/stock
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