What matters is your overall portfolio asset allocation. In reality for portfolio longevity and volatility purposes, your 2-3 year cash bucket and emergency fund are part of your fixed income asset allocation... meaning your fixed income asset allocation is higher than 30%.So do you think my 2-3 years of cash is too much? I have two buckets in my head… 2-3 years of cash-ish, and everything else. The “everything else” is basically 70/30. If I go back to work, I won’t feel the need for 2-3 years in cash, but will still have an emergency fund as a “bucket” (a much smaller bucket, but still a bucket) with everything else at 70/30. Is that different from what you’re saying?
That's fine to have a higher fixed income asset allocation if it meets your needs. However, carving out a special place in a bucket won't make your portfolio last longer, if that's the goal. The bucket makes keeping track of your finances a bit harder... taking from the bucket, returning to the bucket, how much and when... all for no benefit.
This assumes you want a static asset allocation during retirement and don't plan on having it drift based upon market returns.
Statistics: Posted by dogagility — Mon Nov 18, 2024 6:38 am — Replies 7 — Views 1007
