Normal
The important thing is that your rudder does not slop side to side and fore and aft. Up and down does not adversely effect performance or cause bearing wear. When the boat is in the water the rudder will slide all the way up, as the rudder is boyant. If you want, you can cut spacer rings of delron with the id matching the od of the rudder shaft and put them in at the top between main bearing and steering pully.Good sailing.Doug