Is this allocation ok for someone retiring in a few months?

[Anonymous]

Points to consider:

--Within this allocation, the cash equals $356K in a 529 money market and the rest (about $1.5M) is in a regular money market account.
--DH will be taking required distributions from a deferred comp account starting next year of around $500K a year for 10 years
--Spending is around $350 a year including tax liabilities
--Home is worth $1.3M with a $450 principal due in a low interest mortgage

Based on the current environment, is this too much/not enough cash? I think we are plenty exposed to equities right now. Any other place where we can stash our money? Our spending including tax liability is around $350 a year give or take. Also our home is worth around $1.3M and we have a low interest mortgage with a $450K principal.

The reason we have so much cash is due to a recent stock option exercise. We had planned to purchase a second home with that, but now we are rethinking due to the uncertainty in the market.

[Anonymous]

If I were retiring in the next few months, I would want seven years of spending in cash or stable value.

[Anonymous]

You might consider whether and how to give more away.

[Anonymous]

Those are some crazy numbers, both in terms of assets and spending. It sounds like you have won the game, especially considering the 500k deferred compensation! I don't see the reason for holding so much cash unless it makes you feel better. I'd try to avoid any type of market timing. What is your planned rate of withdrawal and when do you actually plan on starting to draw down your portfolio?

[Anonymous]

Allocation is meaningless if you don't know totals.

I once reviewed a 80 year old women's portfolio and she was 90/10 allocation and was coded moderate risk and she agreed to that.

Well I pulled her account she had $500 million. So $450 million in Stocks and $50 million in Cash and short term treasuries.

50 million liquid at 80 is very conservative yet she was 90 percent stocks.

[Anonymous]

Anonymous wrote:If I were retiring in the next few months, I would want seven years of spending in cash or stable value.

Ridiculous

[Anonymous]

Anonymous wrote:Allocation is meaningless if you don't know totals.

I once reviewed a 80 year old women's portfolio and she was 90/10 allocation and was coded moderate risk and she agreed to that.

Well I pulled her account she had $500 million. So $450 million in Stocks and $50 million in Cash and short term treasuries.

50 million liquid at 80 is very conservative yet she was 90 percent stocks.

OP here. I wasn't going to go to that level of detail, but thought it was obvious when I stated the amount of cash.

Actual numbers:

Equities $7.43M
Tax Exempt Bonds $530K
Taxable Bonds $2.79M
Cash $1.98M (529 is $530K)

[Anonymous]

Anonymous wrote:

Anonymous wrote:Allocation is meaningless if you don't know totals.

I once reviewed a 80 year old women's portfolio and she was 90/10 allocation and was coded moderate risk and she agreed to that.

Well I pulled her account she had $500 million. So $450 million in Stocks and $50 million in Cash and short term treasuries.

50 million liquid at 80 is very conservative yet she was 90 percent stocks.

OP here. I wasn't going to go to that level of detail, but thought it was obvious when I stated the amount of cash.

Actual numbers:

Equities $7.43M
Tax Exempt Bonds $530K
Taxable Bonds $2.79M
Cash $1.98M (529 is $530K)

It was obvious when you stated the amount of cash, PP just isn't very bright. I think you are in excellent shape.

[Anonymous]

You need to get a side-hustle STAT or you'll never hit DCUM middle class.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Allocation is meaningless if you don't know totals.

I once reviewed a 80 year old women's portfolio and she was 90/10 allocation and was coded moderate risk and she agreed to that.

Well I pulled her account she had $500 million. So $450 million in Stocks and $50 million in Cash and short term treasuries.

50 million liquid at 80 is very conservative yet she was 90 percent stocks.

OP here. I wasn't going to go to that level of detail, but thought it was obvious when I stated the amount of cash.

Actual numbers:

Equities $7.43M
Tax Exempt Bonds $530K
Taxable Bonds $2.79M
Cash $1.98M (529 is $530K)

It was obvious when you stated the amount of cash, PP just isn't very bright. I think you are in excellent shape.

Very insightful analysis. A person with 13 mil is in excellent shape! LMAO who knew?

[Anonymous]

I retired in my early 50s from Biglaw about 10 years ago. My allocation of invested assets is very similar to yours and I’ve been doing fine. I don’t have nearly as much uninvested cash just sitting there, though. That doesn’t make a lot of sense to me. On the other hand, you have so much money that it really doesn’t matter. You’re fine no matter what. But I have a feeling you know that already.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Allocation is meaningless if you don't know totals.

I once reviewed a 80 year old women's portfolio and she was 90/10 allocation and was coded moderate risk and she agreed to that.

Well I pulled her account she had $500 million. So $450 million in Stocks and $50 million in Cash and short term treasuries.

50 million liquid at 80 is very conservative yet she was 90 percent stocks.

OP here. I wasn't going to go to that level of detail, but thought it was obvious when I stated the amount of cash.

Actual numbers:

Equities $7.43M
Tax Exempt Bonds $530K
Taxable Bonds $2.79M
Cash $1.98M (529 is $530K)

You are rich, congrats. Do whatever you want, you will be fine.

[Anonymous]

That is a lot of cash with 10 years of deferred comp on the way. You also have less than 10% of your net worth in real estate. With that level of assets, I'd consider buying more real estate, especially if you would enjoy a second home or a nicer first home. We keep about 20-30% of our assets in our homes which seems to be a nice balance and gives us plenty of other investable assets.

[Anonymous]

Anonymous wrote:If I were retiring in the next few months, I would want seven years of spending in cash or stable value.

+1

Keep some in the market (because I plan to live for another 25+ years and want the growth). But you need easy access to money that won't decline in value to live off

[Anonymous]

Anonymous wrote:That is a lot of cash with 10 years of deferred comp on the way. You also have less than 10% of your net worth in real estate. With that level of assets, I'd consider buying more real estate, especially if you would enjoy a second home or a nicer first home. We keep about 20-30% of our assets in our homes which seems to be a nice balance and gives us plenty of other investable assets.

Only buy a 2nd home if you will actually use it a lot. We downsized to a 2 bed/2bath. And downsized to a 2nd home with 3 bed/3 Bath. We spend 60% of time in the smaller place and only 40% in the 2nd home (and our 2nd home is a 75 min trip between the two locations).
But that means you have 2 homes to maintain and clean. So just make sure you really would use the 2nd home enough to justify purchasing one. Otherwise, just VRBO/AirBNB when you want to go somewhere