my portfolio is $400,000.
Currently my total cash is only $75,000
Well, if your pension and SS covers expenses, it really doesn't make much difference what you do with this. Heck, I'll take it off your hands, and save you all this worry!I agree I need to keep thinking and do more research.
I believe a lot of people take 2% to 3% each year for expenses. If I don’t need to take any money for expenses does taking 2% to 3% each year and moving it to cash until I have a decent cash balance make sense?
Well, if your pension and SS covers expenses, it really doesn't make much difference what you do with this. Heck, I'll take it off your hands, and save you all this worry!
So consider - why do you need a higher cash balance? You've got about two years worth now. Seems like more than enough. Is there a specific cost coming up you are planning for?
If you really do a need a higher cash balance, why not do it now?
If not, I'd just keep the $400K in a balanced fund, reinvest divs, and let it ride. You might need/want it some day. Just sell some when/if that time comes. People get all worried about selling when a fund might be down, but generally, our funds go up. I think too many miss out on the gains holding out for that 'what-if'.
-ERD50
+1
If you don't think you'll need it other than for emergencies, the $75k should cover that (I don't target that much cash on hand with a much larger portfolio), and the rest should stay invested at whatever asset allocation you are comfortable with. With expenses covered, that might be 100% equities since this is long-term money, or something more balanced if you will sleep better.
I'm assuming you are now retired, and have expenses covered between pension, severance, and SS without withdrawing from your portfolio. My 84 year old mom is in that position, fairly closely. I have no idea what she keeps in cash, but her portfolio is all equities since she intends not to spend it and is investing it for her kids.
I'd think whatever you always kept in cash before retirement would be perfect. Things haven't really changed that much.