Reply to Cash Heavy -- What to do?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]We keep about 2-3 years of our annual spending in cash accounts so that if there is a correction we are not selling into it. The rest of our investing is in equities, private equity and bonds. We are retired and my husbands deferred comp ended last year after five years and about $800k a year. Our social security, pensions and now required IRA distributions totals around $400k a year so and instead of reinvesting all of our dividends we pull out $25k per month. [/quote]

OP here. So do you think we should keep about $1M cash and invest the rest? Start now with $50K a month now? Or should we wait?[/quote]

Not PP.  This is a personal decision. You said before you are 60% equities. So is your 40% in fixed income assets?  If equities tanked, would you have enough funds to last you for a good amount of time?  What’s your comfort level of time?  We’d like between 3-4 years of funds, that’s our choice.  If that was your choice as well and your yearly expenses were 300k, you should have 1.2M in fixed income assets (which includes cash).  This is basic stuff and I’d think your CFP would have this factored into your portfolio. [/quote]

Really you want a little more in fixed income. If equities tank, you sell some bonds and buy the now discounted equities. That gives you more ways you can conver your nut and also leave some assets for your heirs. [/quote]

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