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Old 06-17-2021, 08:50 AM   #41
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NW thanks. I have known about 4 guys that got divorced that I know had a pension and a 401K. They are all still working and I always wondered how they settled those funds.

I'm glad I never had to find out. Lol
I have two friends that got divorced. The first made a little more than his ex-wife, she got 50% of his 401k, and he 50% of hers. She also got 50% of his pension based on the years they were married. Of course, the first 7-8 years he worked before they married he had a much smaller salary, so she got 50% of his best years that made up his pension. Of course, there were investment accounts, house, etc, but we only really talked about the retirement accounts.

My second friend's divorce was a little friendlier. She waived the rights to his pension in full for 60% of his 401k. Of course, he gave her the pre-tax portion while he kept the Roth. He has a pretty rare "super pension" where he can retire at age 50 with ~46% of his salary with COLA adjustments, so didn't ask for anything from her 401k in agreement for her not to touch the pension.
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Old 06-18-2021, 02:25 AM   #42
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Funny how this thread has now turned to the darker topic of divorce. That may be one reason I had concerns about cash in the first place.

I went through an epic divorce early in my adult life. I learned a lot of hard lessons, one of which is that we don't "own" anything. Everything we think we own can be taken away with the stroke of a pen by some judge.

I was fortunate to have learned this lesson at a young age, while I still had some time to recover. They say living well is the best revenge, and while I may not be living as well as the "blow that dough" crowd, I feel like I've made good choices since then. And my attitude toward physical possessions is probably healthier than a lot of folks.
This whole thread direction reminds me of the old joke about "Divorced Barbie" - she comes with half of Ken's stuff! YMMV
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Old 06-18-2021, 12:50 PM   #43
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This whole thread direction reminds me of the old joke about "Divorced Barbie" - she comes with half of Ken's stuff! YMMV

Oh, I think I had heard that one as "all" of Ken's stuff.
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Old 06-18-2021, 03:30 PM   #44
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I'm wondering if my strategy for cash will get me in trouble.

When I RE'd five years ago, I wasn't all that confident that it would work. I waited until I had about one year's worth of expenses in the bank, not counting my 401k, or my regular checking account for routine expenses.

Fast forward five years, and it's all still there. I had it in CDs for a while when those were productive, but now it's in a high-yield savings account which gives me about the same (low) return as CDs these days.

I'm comfortable with this strategy. I have a non-COLA pension which, so far, has covered my expenses without dipping into the 401k, which is allocated about how I want it.

I'm also considering selling the house and not buying another one for a year or so while I scout for a new place. That would be an even bigger pile of cash to manage.

BUT...

Lately I wonder about the safety of keeping cash. What if I lose my health insurance just before a big medical expense? What if someone slips on my front steps and sues me? Would the cash be an easier target than, say, my house or 401k? Would having cash hurt my eligibility for some program I'm not even aware I might need?

I haven't thought this through completely. Assuming I want this money to remain in cash (as opposed to investments) then what other dangers am I exposing myself to that I might not even realize?
It sounds like you are saving your cash for some type of emergency fund. It sounds to me like it is similar to the idea of using CD ladders to protect yourself from invest loss in the stock market. The theory is that you have 3 years of living expenses in CD's that you can cash out each year as needed if the stock market crashes. Then you do not need to sell your investments at a low price to pay the bills. With good stock market years, no need to use the CD's, just renew them to keep the 3 year ladder going.

I dont think using a little bit of cash in that manner would hurt anything, other than the risk of theft. As long as your account stays secure, you are good to go. I would not view your investments as being any safer than cash emergency funds in the event of a lawsuit. That is what insurance is for. I carry a $1 million dollar umbrella policy. Not sure that I need it yet, but it is fairly cheap and protects me from the rare occurence of a lawsuit.
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Old 06-18-2021, 04:14 PM   #45
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I like cash. It's available to spend as needed. Buffet recently raised a lot of cash in his portfolio, so did Gates. Everybody was waiting for the dollar to crash and commodities to explode, except the dollar is up and commodities and bond yields are down.

Cash is not a riskless asset over a decades long timeframe because of inflation, but if you have a 30 year retirement planned and 1 year of that is cash your risk is trivial and owning "trivial risk" is an asset in itself. It reduces your non-trivial risk. It's the perfect thing to have on hand to buy your hamburgers with, when your portfolio falls in half. You would do much worse to have to sell your risky assets at a 50% loss. You can look at the proceeds from your house sale as an "asset" rather than cash since your intention is to plow that back into real estate. That "cash" is simply a placeholder for the value of the next RE purchase.

I think the FBI tracing the BTC tied to pipeline ransom is actually a plus for BTC. It means BTC can't be used as some kind of faceless black market currency without consequence, unlike gold bullion or cash.
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Old 06-18-2021, 07:55 PM   #46
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Does not sound like you are managing cash. Sounds like fear and inertia are managing you. It is the classic conundrum, getting on/off the flee to cash treadmill is too hard. You are stuck.

Pick a cash bucket size and stick with it. Invest the rest. If you can't figure out what to do, donate it, since you will never need it or use it.
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Old 06-18-2021, 09:02 PM   #47
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Oh, I think I had heard that one as "all" of Ken's stuff.
I must remind folks that community property in a divorce does not mean things get split evenly. Ken had a bad lawyer.
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Old 06-19-2021, 02:43 AM   #48
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I'm wondering if my strategy for cash will get me in trouble.
I think inflation is a bigger risk to cash than anything else.

No lawyer worth his salt is going to avoid asking for the value of your bond fund just because you'd need to click "sell" before you click "transfer to counterparty."
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The Dangers Of Cash
Old 06-19-2021, 07:32 AM   #49
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The Dangers Of Cash

I'm sure you've already gotten plenty of "advice" about the question of vulnerability but on the issue of qualifying for various programs, other than long term care/Medicaid qualifications, most programs that operate on a qualification basis mostly consider INCOME to determine eligibility, not cash or investments.
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Old 06-19-2021, 08:46 AM   #50
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My CD's earn $ each day...seems better than many bond categories currently. The more years of cash saved the more secure you'll feel. Invest part of portfolio in equities as a hedge against inflation.

Many retirees I know feel better having most of their $ in cash.
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Old 06-19-2021, 09:32 AM   #51
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My CD's earn $ each day...seems better than many bond categories currently. The more years of cash saved the more secure you'll feel. Invest part of portfolio in equities as a hedge against inflation.

Many retirees I know feel better having most of their $ in cash.
This retiree DID feel better having a good chunk of our portfolio in Cash - up until last year when rates went to basically zero and I had no-where to put maturing CDs.

I see enough clear signs that inflation is not "transitory" (counter to what's being said) so am reasonably concerned at this point about loss in purchasing power of said cash holdings..

Unfortunately, I also think equities are insanely over-valued..and as this week showed all too clearly, can move downward quickly. (What's the old saying.."stocks take the stairs up and the elevator down").

At this point in life, I have no desire to be on the elevator down again so for that reason have kept more than a few years expenses in cash..but with inflation now back, potentially for quite some time..there truly does not seem to be ANY port in the storm..
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Old 06-19-2021, 11:21 AM   #52
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I think @CaptTom's concern was that the boogeyman, men in black helicopters, or a divorce lawyer would take his money. Not inflation. Is that what everyone else is getting from the original post?

Not much can be done about boogeymen or guys in helicopters. Divorce, sadly, is its own topic.

Inflation is something that can be dealt with, and is not that big of a deal.
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Old 06-20-2021, 01:13 AM   #53
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I think cash is safer than a house or 401K. Say a Devious person is sued for liable by some politician.
Chance of a judgement is very high and it will be for a lot.

A Devious person could withdraw all their cash and bury it, this Devious person cannot sell their house in a day (well maybe in this market ) and if they cash out their 401K the tax rate will be highest possible.

Cash is great because if the politician doesn't sue.
Devious person can dig up the money and put it back into CDs, at a low cost.
+1
Thats funny "someone" gave my friend that same advice regarding a judgment recently.
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Old 06-20-2021, 05:42 AM   #54
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I think @CaptTom's concern was that the boogeyman, men in black helicopters, or a divorce lawyer would take his money. Not inflation.
The most realistic risk I can come up with is this: after a very expensive operation, my health insurance company decides I failed to dot an "i" or cross a "t" on my initial application and denies the claim. It's a self-insured plan and I know the company I retired from would do something like that if they could. They're always contracting firms to do audits and try to identify employees and retirees they can boot off the insurance program.

Boogeymen, black helicopters and divorce lawyers aren't really on the list (I hope!) I don't even own a tin-foil hat.

Inflation is a very real risk for me (fixed pension) but I think I've mitigated that to the extent possible. That wasn't really the question, although it's arguably a good reason to reconsider a large cash position.
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Old 06-20-2021, 05:45 AM   #55
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..there truly does not seem to be ANY port in the storm..

I keep hearing smart people say put some in 30 year treasuries. Personally, I try to take a long term view,mbe exposed to all securities on the planet brought index funds and then hold, so YMMV.
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Old 06-20-2021, 07:22 AM   #56
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The most realistic risk I can come up with is this: after a very expensive operation, my health insurance company decides I failed to dot an "i" or cross a "t" on my initial application and denies the claim. It's a self-insured plan and I know the company I retired from would do something like that if they could. They're always contracting firms to do audits and try to identify employees and retirees they can boot off the insurance program.
How does this relate in any way to holding cash? You were asked this earlier in the thread.
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Old 06-20-2021, 08:08 AM   #57
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How does this relate in any way to holding cash? You were asked this earlier in the thread.
As stated in the OP, is cash easier to protect/hide from corporations if he incurs a huge expense he can’t afford.
IMO, cash is no safer than other assets.
To me, it is a bit tin-foil hat. However, I believe medical bills are still one of the biggest reasons for bankruptcy.

Best option for the OP’s efforts, IMO, is to work towards improving our miserable excuse for a healthcare system.
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Old 06-20-2021, 09:17 AM   #58
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401ks (and IRAs and Pensions) are not protected in divorce... at least not from what I've seen.


They’re also not protected from the IRS or from child support.
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Old 06-20-2021, 11:03 AM   #59
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The most realistic risk I can come up with is this: after a very expensive operation, my health insurance company decides I failed to dot an "i" or cross a "t" on my initial application and denies the claim. It's a self-insured plan and I know the company I retired from would do something like that if they could. They're always contracting firms to do audits and try to identify employees and retirees they can boot off the insurance program. ...
But if you were all stocks, all bonds or all cash it wouldn't manke any difference to the risk of something like this happening... it's not line the insurance program is going to say... oh, you have a bunch of cash so pay us.... or oh, you are all stocks, no worries. They will expect payment either way so being in cash doesn't make a difference.
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Old 06-20-2021, 11:35 AM   #60
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... They will expect payment either way so being in cash doesn't make a difference.

How about the cash buried in the backyard that they don't know about?

Or the solid-gold door knobs like those that RobbieB has in his house.

PS. Gotta be careful not to slam the doors with the solid-gold door knobs. The heavy door knobs would just fly off the door.
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