Wannaretireearly wrote: ↑Tue Oct 12, 2021 12:52 am
My 2cents: Assuming I'm getting some income via taxable dividends (although more like 0.2 or 0.3X), I think 2 or 3 years expenses in cash/muni funds is what I'm thinking in ER. Perhaps 4 or 5X if there isn't much dividend income? I feel much more comfortable getting close to 0 cash today, while working. But that's not a great position to be in if my job is lost.
If AA is at 80/20 or 70/30 why not just hold the majority of the bond/cash/safe position in the taxable account (acting as a big EF) and be stock heavy in the retirement account?
Stock Heavy in which retirement account? Trad or Roth?
I'm planning to :
keep such FI as we hold except the I-Bonds/Ca$h in Tax deferred rest stocks
to limit Tax-deferred growth while doing Roth Conversions of the Stocks in tax deferred which lower's eventual rmds
on us or heirs but still allows rmds to be taken from FI ,
so I'll keep the LMP bridge funds to age 70 there as FI
then drop to 3-5yrs rmds at a min in FI there plus a EF buffer which will shrink as I build up I-Bonds in Taxable
Have the Roth be close to if not 100% Stocks
since I Bonds/Ca$h in Taxable could be tapped if needed in a down market for non medical expenses greater than rmds cover
or which would otherwise push us into an undesired tax bracket if drawn from Tax Deferred
which maximizes tax free growth while limiting tax impacts for heirs since the stretch IRA is gone
Taxable Account would be mostly Stocks plus the I-Bonds and a bit of E-fund cash from dividends not reinvested
Heirs should get a stepped up basis cost on Stocks held here and thus limited/no tax impacts
so all up I'll start with 10-11 yrs expected expenses in FI, total portfolio is ~40x those after pension expenses
I have a cola'd federal pension coming which will cover 75% of expenses
we live in a low cost area
and we only need to bridge 8 or less years till Pension and SS combined will be 2x expenses
leaving portfolio as play/legacy/medical EF so i can be aggressive in AA