"Liquidity" in IPS

I just finished Reading 14, When drafting IPS’s for individuals, I noticed that Liquidity always included upcoming one time puchases ( i.e within next 6 months). But there was inconsistency in answers when the clients expenses were greater than income sources. Sometimes the need to provide the differences in expenses was covered in the liquidity section, and sometimes it wasnt. So am I correct in saying that if the porfolio expected returns are sufficient to cover the difference in expenses and income, then this would be covered in the Return Objectives of the portfolio, but if there was a large need in expenses which would ultimately need to encroach on capital, it is only at this point we would place it under the liquidity section ?

Anything that needs to be drawn from the portfolio comes under the liquidity section. The return, though a separate head, has to be looked upon carefully for liquidity constraint. The portion of return attributed to inflation, for instance, wouldn’t be considered as liquidity constraint since that has to remain WITHIN the portfolio. Whereas, any living expenses earned as return WILL be included under the liquidity. Just remember that anything that has to be WITHDRAWN from the portfolio in form of cash has to be under liquidity