nun
Thinks s/he gets paid by the post
- Joined
- Feb 17, 2006
- Messages
- 4,872
Not ERed yet, but my plan is as follows:
1 year of expenses in bank account
1 year of expenses in MM fund and pay all after tax dividends and capital gains distribution into MM.
2 years in short duration bonds held in tax deferred account. If I need money from them I'll transfer some to an equity fund in my IRA and sell the same dollar value of the equity fund in my after tax accounts.
That 4 years of expenses in cash and short duration bonds will be 10% of my portfolio. My asset allocation will be 45/45/10 in a couch potato portfolio made up of low cost index funds. The equities will be a US equity Index and an International equity index with a little bit of REIT. The bonds will be a total bond market index and an intermediate investment grade corporate bond.
I'm not considering CDs right now as I don't think the rates are worth locking the money away for a number of years. I might replace the short duration bonds with tax free muni bonds if bargains are to be had there when I ER.
1 year of expenses in bank account
1 year of expenses in MM fund and pay all after tax dividends and capital gains distribution into MM.
2 years in short duration bonds held in tax deferred account. If I need money from them I'll transfer some to an equity fund in my IRA and sell the same dollar value of the equity fund in my after tax accounts.
That 4 years of expenses in cash and short duration bonds will be 10% of my portfolio. My asset allocation will be 45/45/10 in a couch potato portfolio made up of low cost index funds. The equities will be a US equity Index and an International equity index with a little bit of REIT. The bonds will be a total bond market index and an intermediate investment grade corporate bond.
I'm not considering CDs right now as I don't think the rates are worth locking the money away for a number of years. I might replace the short duration bonds with tax free muni bonds if bargains are to be had there when I ER.