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Old 12-01-2020, 06:51 PM   #21
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Wow, folks are all over the place on this. Expected, and interesting.

I resonate with the popular "3x annual expenses in cash" bucket thing. But for us, now, it is just about tax free cash, vs. 22% taxed cash. Since DW will retire in a bit less than 2 years, I don't feel the need to have scads of tax free cash around. Within out portfolio (64% bond funds and cash) there is 8+x annual expenses and we will down size soon, so post DW retire I feel very confident we have enough to weather most any storm, and we may still move more out of bond funds into more stable munis for some additional hedge.


Thanks for the responses......
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Old 12-01-2020, 08:00 PM   #22
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For us, cash (savings + checking + MM) = equivalent of 1 year expenses. This is the money we live on with no paycheck, no pension, no SS yet. If we anticipate a big ticket item next year, e.g. a new car, that money is added to the cash bucket. Bonds = equivalent of 4 year expenses.
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Old 12-01-2020, 08:40 PM   #23
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Answering from now and forward, now that we've drained our taxable accounts. We keep Roths 100% equity. So post tax "cash" would be our 6 month withdrawals from IRAs to checking and savings accounts for current spending. Range from 2.125% to way less than 1%.
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Old 12-01-2020, 08:53 PM   #24
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Far, far more cash than common sense. It's a good problem to have. Just one that should be managed better.
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Old 12-01-2020, 08:58 PM   #25
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I also keep about $3,000 or so in small bills and silver coins in case things really hit the fan. I'm not a dooms day guy or prepper.
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Old 12-01-2020, 09:09 PM   #26
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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.
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Old 12-01-2020, 09:17 PM   #27
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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.
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Old 12-01-2020, 09:23 PM   #28
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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.
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Old 12-02-2020, 08:05 PM   #29
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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.
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Old 12-02-2020, 09:06 PM   #30
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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?
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Old 12-02-2020, 09:28 PM   #31
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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.
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Old 12-02-2020, 11:22 PM   #32
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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.
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Old 12-03-2020, 07:59 AM   #33
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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.
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Old 12-03-2020, 11:08 AM   #34
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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.
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Old 12-03-2020, 12:04 PM   #35
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Quote:
Originally Posted by pb4uski View Post
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.

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Old 12-03-2020, 12:25 PM   #36
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Almost 1% of NW in cash.
Almost 1% of my annual expenses.
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Old 12-03-2020, 12:34 PM   #37
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15%. I'm comfortable with that.
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Old 12-03-2020, 02:52 PM   #38
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Apparently too much after reading this.
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Old 12-04-2020, 06:01 AM   #39
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Charles Swabb handles it for me...
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Old 12-04-2020, 08:39 AM   #40
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almost no cash. 2-3 weeks worth on average in checking.
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