SecondCor521
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Thanks for your patience.
I understand the excess cash from RMDs. When we managed in-laws situation, that occured. What we had was everything going to local bank checking. All of their income and expense transactions went through that one account.
People have different opinions about what is excess cash, and as you mentioned, what is a good buffer. If you leave too much, you miss interest earned on the excess amount.
We maintained a 6-12 month buffer, as I recall.
Since they already had some stocks in a brokerage, we invested in individual companies and ETF's to diversify what was there. Used JNJ, DUK, and SO with success. VTI total stock is a simpler option.
I did their taxes, and knew what choices made more sense.
Thanks.
The flip side of excess cash and missing out on earnings is having to sell low because you need cash when you didn't expect. I personally keep very little cash, but in this case I have a fiduciary-like obligation, so am thinking 12-18 months, maybe half in money market and half in short term CDs.
I'm still thinking I'll swap between (taxable-income-producing) bond funds in taxable for (not-so-much) stock funds in the IRA.
I also do the taxes in this case.