How much post tax cash do you keep around?

[Montecfo]

Have probably 10 percent of portfolio in MM and CD's, a big chunk of my debt allocation.

The CDs will be moving into Short term bonds with rates now so low. But still very low risk, very highly liquid.

 

[Ready]

I have at least ten years of expenses in “cash”, but I don’t like the use of the term cash as it is overly generic.

I keep about 18 months of expenses in an online savings account. The rest is in a CD earning 3.5%. Since I only have 55% invested in equities, the rest has to be in fixed income. I alternate between bonds and CDs for my fixed income investments based on where I can get the best yield. At the time I opened the CDs 3.5% was better than my bond funds were paying and there was no interest rate risk. With those CDs maturing early next year I will likely be moving them back into bond funds since CD rates are absurdly low right now.

 

[Dash man]

I keep at least five years in CDs, savings, and checking. We also have Flexible Retirement Annuities that are like tax deferred savings accounts at this point since we can withdraw from them anytime. We’d have to pay tax on the interest from the annuities, but not the principal. They’re good for another 4-5 years living expenses.

 

[marinauser]

I keep one year of expenses in cash at the start of the year and spend down half to 2/3rds during the year since dividends still come in. Usually capital gain distributions and year end dividends get me back up to the total I want to start the next year. I also keep a year's expenses in cash in the 401k that I could access in 3 or 4 days if needed. This gives me at least a year or more cushion in case of a big downturn. Overall portfolio is 65% equities and 35% cash and bonds. Cash is about 3 to 4% depending on time of year. All bonds are in tax deferred accounts. Only working cash and equities on taxable account. Our ages mean that we can tap deferred accounts whenever we want but no RMD yet.

 

[gerntz]

So would you rather have depreciating cash or a Social Security check indexed to inflation? I mean if you can live off SS check, do you need much cash?

 

[marinauser]

For us, pre-tax SS if we started right now would probably only equal about 20-25% of our yearly expenses and 85% would be taxed. So we just let it build - may take at 67 but may wait until 70 - its a gamble for us either way and we assess each year.

 

[jollystomper]

I believe we have a higher percentage than most folks here, 21%. Enough to go at least 5 years w/o being forced to sell any stocks or bonds.

 

[WhenIsItTime]

I went heavily invested in stock in April/May and backed off after Pfizer vaccine news pop to where cash is 8% or 7 years of expenses. Don’t necessarily like having that much on the sidelines given taxable dividend income pays half my bills, but felt like taking some risk off the table.

 

[scrabbler1]

I have set up my portfolio so it generates enough money every month (with a small cushion) to pay my bills. Therefore, I don't need any meaningful cash account like most of the rest of you have. What I keep in my local bank's checking account is about 0.3% of my taxable portfolio and serves two purposes: to enable me to meet the minimum balance requirements to avoid monthly fees, and to handle small, unforeseen expenses which may arise in a given month. I have another "slush fund" to cover any larger, unforeseen expenses but it is an intermediate-term, muni bond fund which earns about 2-2.5% in mostly tax-free interest. I have sold shares in that fund, on average, less than once per year for the last ~30 years.

 

[Time2]

Did they provide the ol'man's address?

That's not a good situation, I'm sure there are some thieves trying to find his address as I type.


The Dave Ramsey video.
Dave says, when he says "Cash is King" this is not what he means.

 

[Mr. Tightwad]

Almost 1% of NW in cash.
Almost 1% of my annual expenses.

 

[mystang52]

15%. I'm comfortable with that.

 

[CSdot]

Apparently too much after reading this.

 

[kitesurfer2]

Charles Swabb handles it for me...

 

[jebmke]

almost no cash. 2-3 weeks worth on average in checking.

 

[VanWinkle]

2.5% in actual cash in a Rewards checking account paying 1.75%

 

[RetireAge50]

We have 24% in cash, CD’s, and stable value. We set up our 3 legged stool early (pensions, SS, and portfolio). Since SS is still a long ways off we use these stable sources as a replacement for now.

 

[CyclingInvestor]

Refill back up to (3 months expenses + 10k) at the start of each quarter, reinvest the excess dividends, so <1% cash.

 

[ShokWaveRider]

As RobbieB said a FAT Chunk. So that any expense, (Even a moderately expensive car) and a new AC, 2 new 9ft Patio Doors, Pool Resurface, New Screen Enclosure etc. would not worry me as we have a lot of cash in 5 year CDs and do not want to incur any penalties.

 

[frances]

Ok, so I want to ask a slight twist on this question.

In reading through the posts on this thread it looks like most everyone here who says they have "cash" has it in an account somewhere. Fair enough.
And there were a few snickers about the Dave Ramsey caller who said his elderly father had $500k in actual cash on hand.

That leads to my question:
If you have an actual "Bank Holiday" where you really CANNOT get to your "cash" in any institution but you need currency what kind of shape are you in? i.e. how much actually currency do you have or do you think you should have on-hand for such an emergency?

 

[jimbee]

A year or two of base expenses in cash. Everything else is in Vanguard or Fidelity funds.

 

[PaunchyPirate]

Ok, so I want to ask a slight twist on this question.

In reading through the posts on this thread it looks like most everyone here who says they have "cash" has it in an account somewhere. Fair enough.
And there were a few snickers about the Dave Ramsey caller who said his elderly father had $500k in actual cash on hand.

That leads to my question:
If you have an actual "Bank Holiday" where you really CANNOT get to your "cash" in any institution but you need currency what kind of shape are you in? i.e. how much actually currency do you have or do you think you should have on-hand for such an emergency?

I usually have between $20 and $150 ready cash in my pocket. Maybe $15 in coins in the coin cup and car console.

 

[Palmtree]

I keep between $500 and $800 in $20's in the house, just in case I run across something for sale over the weekend and the local seller prefers cash. From memory I've used it to buy power tools, kayaks, and washer/dryers.

 

[phil1ben]

I do not think these answers standing alone are helpful as a basis of comparison because so many long-term circumstances affect how much cash one holds. For example, (a) some may have parents or children that they may need to care for and support for an extended period of time which expenses are difficult to predict, (b) others, like myself, have a significant percentage of their investments in real estate and require cash to buy and sell properties or interests therein, and (c) others may be receiving most of their income through very secure pensions and have less of a need for cash holdings.

Nevertheless, to answer your question, I keep about 20% in CDs and Money Markets. That 20% represents about 12 years of typical expenses.

 

[indiajust]

one year is enough in cash for me