Hello all,
So we have been fortunate to reach our FI number early on. We have been in 100% equities as we just turned 40, so the horizon is long. Now that we are at the number, we are discussing leaving our higher paying jobs for jobs that cover our expenses. This would mean that we would stop contributing. I wanted to change to more of a 70/30 split to reduce volatility. I have a couple of options and wanted to hear some thoughts.
1. Change 401k money to all bonds for now which should be around 30%. This would mean everything in taxable would be equities and would be more volatile and would have a long horizon before we could access the 401k so I think balancing would still be an issue down the road
2. Move 401k to 70/30 split and then use future contributions to bonds in taxable to get to 70/30. We would use the next couple of years to add in this money. I think this is reasonable as the split will then be in both 401k and taxable.
I'm leaning toward #2 so that there is a mix in both to reduce the taxable volatility that we will access earlier.
Any other thoughts on balancing going forward after we stop contributing? There will likely be 5-10+ years where we won't be using the money and would like to try to avoid taxable events to balance, but I suspect other than changing more to bonds in the 401k there isn't a way to achieve that without selling equities to bonds.
Thanks in advance!
So we have been fortunate to reach our FI number early on. We have been in 100% equities as we just turned 40, so the horizon is long. Now that we are at the number, we are discussing leaving our higher paying jobs for jobs that cover our expenses. This would mean that we would stop contributing. I wanted to change to more of a 70/30 split to reduce volatility. I have a couple of options and wanted to hear some thoughts.
1. Change 401k money to all bonds for now which should be around 30%. This would mean everything in taxable would be equities and would be more volatile and would have a long horizon before we could access the 401k so I think balancing would still be an issue down the road
2. Move 401k to 70/30 split and then use future contributions to bonds in taxable to get to 70/30. We would use the next couple of years to add in this money. I think this is reasonable as the split will then be in both 401k and taxable.
I'm leaning toward #2 so that there is a mix in both to reduce the taxable volatility that we will access earlier.
Any other thoughts on balancing going forward after we stop contributing? There will likely be 5-10+ years where we won't be using the money and would like to try to avoid taxable events to balance, but I suspect other than changing more to bonds in the 401k there isn't a way to achieve that without selling equities to bonds.
Thanks in advance!
Statistics: Posted by RunningUp — Fri Oct 04, 2024 4:57 pm — Replies 5 — Views 241