Life in Transition - Amount to Keep in Cash?

[ethereality]

Hi everyone,

I'm in my mid-20s, and taking a gap year, traveling through India. In reviewing my finances, I realize I might have too much in cash. Currently, I have about $40k in cash, and $210k in investments.

My considerations:

- I'm moving back to the US in 6 months with my partner.
- I'm looking for work in a field I have a master's and extensive experience (I anticipate it will take ~3 months to find a job (though I will start my search in Feb 2018))
- My partner is transitioning careers where he doesn't have as much direct experience, may take him longer to find work (moving out of academia into industry).
- My partner will have about $1k max in cash, has been living for years on student stipends
- We hope to move to NYC or another very HCOL area.
- We need cash to move from India to US, to retrieve my dog in another state, and to just in general gather our belongings from storage in yet another state. I will front moving costs until my partner finds a job to pay me back.
- We could stay for free with family while we get ourselves put together, but we don't want to rely on family if we don't have to.
- Including flights home, I anticipate $1500 will cover my remaining expenses in India.

Is 40k too much, if you were me? If I invest, all the money would be going to brokerage accounts (already filled up other buckets).

[Anatidae V]

I'm not entirely familiar with the US tax/retirement system, but if you wait until January, can you put it into tax advantaged accounts? If so, I'd wait the extra month or so. Based on your spending before your gap year, can you guess at 6 months expenses for the two of you (or just you, if you both pay your own way)? I would put anything beyond that into a tax advantaged retirement account in January. :)

How was the gap year?

[ethereality]

That's a good idea, thanks! I think I can only put $5500 in a IRA in Jan, since I don't have a real job yet. It's hard to estimate monthly expenses since I've never lived in a place quite as expensive as NYC, but I'm guessing $3000 - 4000/month as a roomy estimate for two? So that means, I should still have about $10k to invest either right now, or split up over the next 5 months.

The gap year is going well, learning a lot of skills both career and for life on my own terms - it's a little sneak preview of what being retired will be like, though I have about 10 years of work before I'm really FI.

[COEE]

You can only put money in a tax-deferred IRA if you've had earned income.  Also, once it's in an IRA it's hard to get it back out if you need it in an emergency - so be careful what you choose here.

You're only talking a year.  I'd hold onto it until you know what your expenses are really.

[Crease]

That's a good idea, thanks! I think I can only put $5500 in a IRA in Jan, since I don't have a real job yet. It's hard to estimate monthly expenses since I've never lived in a place quite as expensive as NYC, but I'm guessing $3000 - 4000/month as a roomy estimate for two? So that means, I should still have about $10k to invest either right now, or split up over the next 5 months.

The gap year is going well, learning a lot of skills both career and for life on my own terms - it's a little sneak preview of what being retired will be like, though I have about 10 years of work before I'm really FI.

$ 3,000 - $ 4,000 is a good estimate for NYC. My wife and I live in Manhattan and are around $ 3,000 with a dog and relatively low rent.