- Debt: None
- Tax Filing Status: Single
- Age: 35
- $1 million in income-generating assets:
- ~$700K Taxable (with ~$50K of unrealized gains)
- ~$250K Tax-deferred (pre-tax 401k and HSA)
- ~$60K Tax-free (Roth IRA and 401k)
- Asset allocation: 80% stocks / 20% bonds
- International allocation: 25% of stocks
- Standard 3-fund portfolio (Total US Stock Market VTSAX, Total International Stock Market VTIAX, and Total US Bond Market VBTLX)
- $75K cash (checking, savings, and no penalty CDs)
- $400K home (owned outright) in a low cost of living area
- I’m not sure I’ll be retired forever and may try some sort of relatively low-income self-employment in a few years. Though I think one million in income-generating assets is enough for myself, I’ll definitely need more If I marry my girlfriend (who has a low net worth) and we decide to have kids.
- I’m insured with a 2 million umbrella policy
- Please criticize my portfolio, I’m open to all feedback!
- How should I best take advantage of the following low income years?
A) Realize long term capital gains until I fill up the 15% tax bracket?
B) Perform Roth IRA conversions of my pre-tax 401k until I fill up the 15% tax bracket?
C) Keep a low income to maximize tax credits? (If my MAGI is $10K, I'll receive a $4,000 ACA premium tax credit. The ACA premium tax credit linearly decreases to zero at as I approach a MAGI of $45K.)
D) Something else?
- Is $75K cash appropriate for my situation?
It’s about 2 years’ worth of expenses and 5% of my total net worth. I do not expect any large purchases on the horizon.