Personal Investments • Retired: All Out on TSLA/NVDA/NVDL - 2 Fund Portfolio AA & IRA Withdrawal Questions

I recently moved to a nearly 90% Cash Position after selling the majority of my Tesla (TSLA) and more recently Nvidia Double Leverage (NVDL) positions via Covered Calls. Not rehashing here but there is another long post if interested.

I have 2 key questions now. My ultimate goal is to be at a 2 Fund Portfolio with Cash (75%/20%/5%) via Vanguard Total Stock/ Total Bond/ Cash (VTI/BND/Cash) and will be withdrawing roughly $317k/year via a Substantially Equal Payments Program (SEPP). Overall Portfolio is $10.07m.


Debt: Estimated 2024 Tax Liability: $250,000
Annual Spending: $300,000/year
Tax Filing Status: Married Filing Jointly
Tax Rate: 37% Federal for 2024, ~24% Federal for 2025
State of Residence: TX
Age: 50
Desired Asset allocation: 75% stocks / 20% bonds / 5% cash
Desired International allocation: 0% of stocks

Portfolio is roughly $10,070,000


Current retirement assets

Taxable - $3.326m
22.51% or $2.251m cash
11.45% NVDA $65 12/18/26 Call - 1.145m

His Roth IRA at Fidelity - $105k
1.05% NVDA - $105k

IRA at Fidelity - $6.181m
61.81% Cash - $6.181m

Her IRA at Fidelity - $427k
4.27% Cash - $427k

Her Roth IRA at Fidelity - $10k
0.1% NVDA - $10k


Questions:

• How does everyone do their Asset Allocation? Do you exclude Annual Liabilities or money needed in the next 6 months?

• Ex: If I have a 10m Portfolio today. Do I simply allocate 75% (7.5m) to VTI, 20% (2m) to BND, and 5% (0.5m) to Cash. As I spend down the cash, do simply rebalance then. Or

• Ex: If I have 10m Portfolio, but have 250k in Tax liability and $300k in annual spend, do I allocate the % against Portfolio less liabilities: $9.450m 75% (7.0875m) to VTI, 20% (1.89m) to BND, and 5% (0.475m) to Cash?

• Has anyone used a SEPP to reduce future Required Minimum Distributions (RMD’s)?

• With over 60% (over $6m in IRA’s), my RMD’s look ridiculous. I estimate my RMD when I am 75 in 2049 will be over $1.8m with estimated tax 735k. That just makes no sense to let that happen.

• So I plan on not touching my Brokerage account and letting that grow since long term Capital Gains is currently taxed at 20% rate. I can withdraw up to $319k/annually via Substantially Equal Periodic Payments (SEPP) on an amortization schedule from my IRA with no penalty at a tax rate of 24%. That beats the future 37% tax rate of RMD’s.

Thoughts?

Key Points

I am 50 years old (retired) and my wife is 48. We have 2 kids in College (21 & 20). We have no debt beyond upcoming 2024 Taxes estimated @ $250k. Our house and vehicles are paid off. In theory, the kids will come off payroll in 2 years. My 20 year old graduates in Spring of 2025. My 21 year old graduates (MBA) in Spring 2026.

We have set up a Donor Advised Fund (DAF) and will further fund by December 2024 once I figure out taxes completely. We are also setting up a Family Trust. That is the reason we are using Vanguard ETF’s inside of Fidelity. We need the portfolio to be transferable otherwise we would look at Fidelity mutual funds.

Statistics: Posted by roguewarrior0 — Fri Oct 11, 2024 3:53 pm — Replies 13 — Views 884

---