Hey all, as always your assistance is very much appreciated. I'll try not to be too long-winded. (try, mind you)
We're getting close. Both turning 55 later this year and should be done at the end of 2021 at 57. No kids.
We each have a 401K and a diversified after-tax portfolio at Fidelity. The latter will fund the "gap" and maybe even a bit further. We also have an Ally account with 3 years of expenses for emergencies/recession that I am not counting into the mix.
Overall for the three accounts our AA is about 63/37. I know I'm thinking we should be getting it closer to 55/45 being three years out. My issue is the after-tax account is 78/15/7, (the 7 in cash just waiting to re-allocate).
But I know that because of the time horizon when this money is needed is only three years put, that money should be more conservative than the 401K money. Maybe even 50/50. But it had always been more aggressive because the conventional wisdom was not to have tax inefficient investments in an after tax account such as income producing bonds.
Is my thinking all wrong? If it is correct, should I bite the tax bullet until we retire and dump a lot more into a diversified bonds prtfolio? Munis?
After 35 years of thinking almost always about equities, I am woefully under-schooled in fixed income investments.
Thanks for your collective wisdom.
We're getting close. Both turning 55 later this year and should be done at the end of 2021 at 57. No kids.
We each have a 401K and a diversified after-tax portfolio at Fidelity. The latter will fund the "gap" and maybe even a bit further. We also have an Ally account with 3 years of expenses for emergencies/recession that I am not counting into the mix.
Overall for the three accounts our AA is about 63/37. I know I'm thinking we should be getting it closer to 55/45 being three years out. My issue is the after-tax account is 78/15/7, (the 7 in cash just waiting to re-allocate).
But I know that because of the time horizon when this money is needed is only three years put, that money should be more conservative than the 401K money. Maybe even 50/50. But it had always been more aggressive because the conventional wisdom was not to have tax inefficient investments in an after tax account such as income producing bonds.
Is my thinking all wrong? If it is correct, should I bite the tax bullet until we retire and dump a lot more into a diversified bonds prtfolio? Munis?
After 35 years of thinking almost always about equities, I am woefully under-schooled in fixed income investments.
Thanks for your collective wisdom.