The proceeds from the sale of our house went through today so we have a pile-o-cash to allocate. I'd appreciate throwing some ideas off of you lot.
- Me - 39, him - 40, three littles 6, 3, & 1
- Past our FI number. I'm FIREd, he will be asking to go to part time soon. If not he'll finish out 2021 and also FIRE.
- No debt, rent, unsure what the future holds
- Investments/cash: $3.6M (more info below)
- Target AA: 60/40 stocks/bonds, 60% US/40% international for both categories
We have been employing a bond tend/reverse equity glidepath strategy. Our current target AA is 60/40 and we'll increase stocks slowly over time over the first ten years in retirement. Practically speaking we expect to spend down our bonds in our taxable account in when we start living off of our investments. We have chosen to keep our Roth money in stocks for growth, and put our bonds first into traditional retirement accounts. Once we ran out of room there we moved to putting bonds in our taxable account. The reasoning for that was we wanted to preserve long term growth of stocks in our Roth as we plan on spending that money last. We also don't intend to have a bunch of bonds in taxable forever since eventually we will start living off of our money.
That said, we just sold our house and have over $450k to deploy. Ordinarily we'd just stick with our current plan, which would be putting VTSAX/VTIAX/VTBLX/VTABX in taxable. I'm now considering whether we should stick some bond money instead into muni bonds. I'm waffling on that so I'd love your ideas.
Random thoughts rattling around in my head:
- Muni bonds would be tax-free in a taxable account[ - yay/li]
- I don't know much about muni bond funds, so which one to pick?
- My husband should be quitting work soon-ish, so we won't be in a high tax bracket going forward
- Maybe we'll want to do something fun in the future that produces income?
- I'm not sure what percentage of bonds in our taxable account should be muni vs. total bond index funds
As of a few months ago our money was 50% taxable, 20% Traditional, and 30% Roth. Obviously this cash infusion will increase the % of taxable in the portfolio.
