I'm 40 years old, recently left full-time employment having saved enough money ($1.25 million) to cover my monthly expenses ($4k/month) at a 4% withdrawal rate. I've read in many places I should be financially free, since my income from a 4% withdrawal rate on my investments exceeds my monthly expenses, but I don't feel quite "free" yet.
Here is my dilemma, all of my money is currently in cash, including $1,050,000 in my brokerage account and $200k in my IRA account. A good portion of my savings to date, roughly 65% of it, came in the form of RSUs (restricted stock units) from my previous employer which appreciated greatly over the past 5 years. I had so much of my net worth in those RSUs, all other income went into a money market fund earning nominal interest. I have since sold all of my RSUs and now all of my money is in cash.
I have some self-employment income which ranges from $5k to $10k each month, but not sure how long that will continue until I need to find something else to make a little side money each month (if needed). I've paid my house off in full, and my largest expense each month is COBRA at ~$1,700/month, followed by housing expenses at ~$1,300/month (e.g., property tax, HOA, insurance, etc.). There are expenses I know I can reduce, like insurance from COBRA to ACA and will do so once that runs out.
I read a post by MMM about entering "retirement" at the beginning of an economic cycle, say in 2009, vs. being 10 years into it (or some would say at the end of the cycle). Given we are at all time highs in the stock market, what is the most prudent way to get back into the market? Is it still recommended to own 100% VTI at all-time highs or would you allocate a portion of money into BND (if so, how much)? If there are other alternative investments too, that would be of interest.
Please let me know your thoughts on how you would recommend proceeding. Any guidance and advice would be greatly appreciated based on where I'm at and the current economic climate. Thanks for your time!
