I spent 2024 focusing on T-Bills and VUSXX, and now I’m afraid I may be sitting on too much cash equivalents.
Single, 54, LCOL, no debt or mortgage, probably 10 years from retirement. Annual income between $200,000-$300,000 (depends on bonus) and live significantly below my means. Tax bracket either 32% or 35% federal and average 5.5% state.
Investments: approximately $2.3m: 39% VTSAX, 20% IXUS, 4% VIOV and 37% Fixed Income (primarily VTBLX, T-Bills, VUSXX and Series I Bonds). 60% traditional 401(k), 5% Roth, 30% taxable and 5% I Bonds. Fully fund 401(k), Backdoor Roth IRA and $20,000 in I Bonds (individual and trust) each year, with extra to taxable (in 2024, most of that went to TBills/VUSXX).
Issue: Of my 37% currently allocated to fixed income, 5% is in short term T-Bills and about 6% is in VUSXX. I’m thinking that almost 1/3 of my fixed income allocation in cash equivalents may be a bit too much. It’s at least five years of expenses, probably closer to seven or eight.
2025: Reduce VUSXX to $50,000; T Bills to $50,000 (maybe consider 7 or 10 year T-Notes instead as the T-Bills mature) and buy VTBLX in 401(k) after selling VTSAX in 401(k) and buy VOO in taxable to maintain a 40% US stocks, 20% international and 40% fixed income allocation. Does that work or will I still be sitting on too much cash equivalents in taxable?
Thanks in advance!![:sharebeer]( "celebrate")
Single, 54, LCOL, no debt or mortgage, probably 10 years from retirement. Annual income between $200,000-$300,000 (depends on bonus) and live significantly below my means. Tax bracket either 32% or 35% federal and average 5.5% state.
Investments: approximately $2.3m: 39% VTSAX, 20% IXUS, 4% VIOV and 37% Fixed Income (primarily VTBLX, T-Bills, VUSXX and Series I Bonds). 60% traditional 401(k), 5% Roth, 30% taxable and 5% I Bonds. Fully fund 401(k), Backdoor Roth IRA and $20,000 in I Bonds (individual and trust) each year, with extra to taxable (in 2024, most of that went to TBills/VUSXX).
Issue: Of my 37% currently allocated to fixed income, 5% is in short term T-Bills and about 6% is in VUSXX. I’m thinking that almost 1/3 of my fixed income allocation in cash equivalents may be a bit too much. It’s at least five years of expenses, probably closer to seven or eight.
2025: Reduce VUSXX to $50,000; T Bills to $50,000 (maybe consider 7 or 10 year T-Notes instead as the T-Bills mature) and buy VTBLX in 401(k) after selling VTSAX in 401(k) and buy VOO in taxable to maintain a 40% US stocks, 20% international and 40% fixed income allocation. Does that work or will I still be sitting on too much cash equivalents in taxable?
Thanks in advance!
Statistics: Posted by CrazyCatLady — Sun Dec 29, 2024 12:39 pm — Replies 0 — Views 92