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Old 11-07-2020, 09:39 AM   #61
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Less than 60% of my portfolio is in stocks. Because I do not like bonds, the rest is in short-term instruments or I bonds. I have very little in real bonds.

With a low WR of less than 1%, that cash will outlast me. No fear of having to sell stocks in a prolonged market downturn.
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Old 11-07-2020, 09:47 AM   #62
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Originally Posted by aaronc879 View Post
I plan to have minimum 2 years expenses in a Money Market account. Then i'll have between 2-3 additional years in CDs. I won't put it all in CDs because in the past I put my cash in CDs then needed to take a penalty when I needed to get the money early. I lost principal on that CD.
I really hesitate to bring this up because this board is not exactly in love with anything related to cryptos but you may want to look into parking SOME of your savings into stable coins (pegged to USD) - spread small-ish amounts between a few places if you're concerned about risk.

https://celsius.network/rates/
https://blockfi.com/rates/
https://nexo.io/earn-crypto#
https://crypto.com/en/earn.html
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Old 11-07-2020, 12:05 PM   #63
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Right - just to clarify - I should have asked how many years of living expenses do people hold in cash reserve?
Virtually none. A couple months worth of bills, that's about all you need. Just enough to comfortably tide us over any foreseeable short-term glitches.

The rest stays invested. When you need money, take it out of your investment portfolio. Just maintain your chosen asset allocation, and stay approximately within the 4% SWR.

Especially these days, when all my banks are dropping their savings account interest rates to 0.30%.


People talk about N-years of expenses in cash, but never talk about what happens after. Suppose you start with 3 years cash, a 2 year crunch comes and now you are down to 1 years cash. What then?
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Old 11-07-2020, 12:12 PM   #64
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Virtually none. A couple months worth of bills, that's about all you need. Just enough to comfortably tide us over any foreseeable short-term glitches.

The rest stays invested. When you need money, take it out of your investment portfolio. Just maintain your chosen asset allocation, and stay approximately within the 4% SWR.

Especially these days, when all my banks are dropping their savings account interest rates to 0.30%.


People talk about N-years of expenses in cash, but never talk about what happens after. Suppose you start with 3 years cash, a 2 year crunch comes and now you are down to 1 years cash. What then?
For me, I would take out enough to get to the top of the 12% bracket. Normally I don't need nearing that much so I can build up a good amount of cash that way. Most people on here would likely want to go at least to the top of the 22% bracket.
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Old 11-07-2020, 12:23 PM   #65
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For me, I would take out enough to get to the top of the 12% bracket. Normally I don't need nearing that much so I can build up a good amount of cash that way. Most people on here would likely want to go at least to the top of the 22% bracket.

I suspect that most people here are, or soon will be, close to the end of the 12% point. Or past it. If you have been a successful investor and are taking RMDs and Social Security then you are likely to be getting quite a bit of taxable income.

A million or two dollars of portfolio at 4% withdrawal is a handsome income. And RMD percentage goes up every year.
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Old 11-07-2020, 12:27 PM   #66
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I suspect that most people here are, or soon will be, close to the end of the 12% point. Or past it. If you have been a successful investor and are taking RMDs and Social Security then you are likely to be getting quite a bit of taxable income.

A million or two dollars of portfolio at 4% withdrawal is a handsome income. And RMD percentage goes up every year.
That's valid for most on this forum but not for most people overall. I have never in my life(20+ years of work) made an income over the 12% bracket limit and I won't in retirement either. There is definitely not a "one size fits all" approach to this topic or most others.
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Old 11-09-2020, 10:10 AM   #67
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I am holding five years in cash. I have planned for all living expenses, including property tax, new car, life insurance payments, emergency medical bills, vacations. The money is literally sitting in savings and checking accounts as CD rates are so low, I won't bother to move the money.
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Old 11-09-2020, 12:20 PM   #68
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I often quote my AA as being 45/45/10, but in reality the 10 is closer to 15 and the FI is closer to 40. Gotta find a better place for all of that cash, or step up my spending quite a bit.
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Old 12-01-2020, 07:52 PM   #69
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I don't have a whole lot, maybe 3%. But then my military pension and SS pay all the bills now that I'm debt free so really no need to hold much cash.
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