So we've got the amount firecalc says gives us good enough odds for portfolio survival with our monthly budget. Said budget already has about $500/month extra built in that we'll throw into savings account every month until needed for unexpected bigger expenses.
Outside of that we're currently in the process of accumulating an additional buffer outside of the safe withdrawal calculations that we're calling the vacation fund, should end up seeded with about 120k-200k depending on how market does and when we stop working. Figure can also be used to smooth the ride if bad market downturn in crucial early years of withdraw phase, maybe pull part of our annual expenses from it to make happy sleep at night.
What I'd like advice on is how to account for it. Our portfolio will have both taxable and tax deferred, split up for tax efficiency with intl stock fund and stock funds on taxable side, stock funds and bond funds on tax deferred.
I've got four options in my head so far:
1. Put it in a mutual fund in taxable side, something like Wellesley. So when need/want to sell shares sell 'em and I'm done, doesn't impact rest of asset allocation.
2. Put in mutual fund on tax deferred side for tax efficiency. When need/want sell shares sell from stock fund on taxable then do musical funds in deferred side with transfers to make wash.
3. Split into two funds for a poor man's Wellesley, with a stock index fund on taxable side and bond index fund in deferred.
4. These are all accounting silly gimmicks you dumbass, just keep entire portfolio locked into asset allocation and account for the amount in the buffer virtually.
Any advice is appreciated, and as always thanks in advance for your wisdom.
Outside of that we're currently in the process of accumulating an additional buffer outside of the safe withdrawal calculations that we're calling the vacation fund, should end up seeded with about 120k-200k depending on how market does and when we stop working. Figure can also be used to smooth the ride if bad market downturn in crucial early years of withdraw phase, maybe pull part of our annual expenses from it to make happy sleep at night.
What I'd like advice on is how to account for it. Our portfolio will have both taxable and tax deferred, split up for tax efficiency with intl stock fund and stock funds on taxable side, stock funds and bond funds on tax deferred.
I've got four options in my head so far:
1. Put it in a mutual fund in taxable side, something like Wellesley. So when need/want to sell shares sell 'em and I'm done, doesn't impact rest of asset allocation.
2. Put in mutual fund on tax deferred side for tax efficiency. When need/want sell shares sell from stock fund on taxable then do musical funds in deferred side with transfers to make wash.
3. Split into two funds for a poor man's Wellesley, with a stock index fund on taxable side and bond index fund in deferred.
4. These are all accounting silly gimmicks you dumbass, just keep entire portfolio locked into asset allocation and account for the amount in the buffer virtually.
Any advice is appreciated, and as always thanks in advance for your wisdom.