A Great Rule of Thumb

As I mentioned a while back, Frank Armstrong—a terrifically smart CPA—and I are working on a book that will be called Rescuing Your Retirement.

While talking the other day, Frank came up with this wonderful rule of thumb:

“While one size never fits all, at all times you’ll probably want to have enough money in short-term bonds and money market funds to cover the money you are going to withdraw from your retirement accounts over the next seven years. 

That way if the market takes a dive as it probably will sometime during your retirement, you will have plenty of time for it to recover.”

You see why I think so highly of Frank.