sell high/buy low??

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hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

sell high/buy low??

Post by hacksaw2025 » Mon Sep 11, 2017 7:46 pm

Hello all,
Here is a snapshot of our retirement/financial picture.
Emergency fund = Do not have one.
Debt = Mortgage 3.75% for 30 years, balance = $118,000, payment = $556/month
No other debt.
Tax filing status: Married filing jointly
Tax rates: 25% federal; State = 7.15%
State of residence = Maine

My wife and I are both 58 years old, and we are both looking to retire at age 65. Besides the savings below, I will receive a pension of approx. 2k/month at age 65. And most likely, we won't need to tap into these accounts until our retirement age.
Here is our situation:
My wife has a 401(k) with Empower and I have a 403(b) with Fidelity. We both have Roth’s with Vanguard.
The 401(k) (roughly $100k) current status: (dollar cost averaging/maxing out the contribution):
The 403(b) (roughly $200k) current status: (dollar cost averaging/maxing out the contribution):
The Roth’s (roughly 10k in each) current status: (dollar cost averaging/maxing out contribution):

Specific combined portfolio percentages:
Small Cap (Vanguard index) 4%
Total US stock (Mix of Vanguard & Fidelity index) 36%
Total International (Fidelity index) 12%
Real Estate (Fidelity index) 12%
Total US Bond (Fidelity index) 32%
Inflation Protected (Fidelity index) 4%
Overall combined portfolio percentages: Stock 64% & Bonds 36%

My question: With retirement, and needing the money in less than 10 years, I have some concerns...As you see, I have nothing in "cash". Should I sell off some stock now with the market being "up" to put into a Fidelity MM? By doing that, I'm thinking it could do two things....make my AA a bit more conservative as well as give me some cash to make future stock purchases when the market makes a correction. Am I thinking too much?? thoughts on the idea?? or do I just stay the course and power forward??
Thank you!!
Hacksaw

livesoft
Posts: 56514
Joined: Thu Mar 01, 2007 8:00 pm

Re: sell high/buy low??

Post by livesoft » Mon Sep 11, 2017 7:49 pm

I'm retired about your ages and have no cash. Equity and bond funds are just fine with me. And you all have a higher bond asset allocation than we do.

I think you are thinking too much.

I could be wrong, too.

See also this about "cash cushion" -> https://earlyretirementnow.com/2017/03/ ... h-cushion/
This signature message sponsored by sscritic: Learn to fish.

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David Jay
Posts: 3979
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: sell high/buy low??

Post by David Jay » Mon Sep 11, 2017 8:58 pm

There is nothing wrong with moving some assets from stocks to bonds. How about 60/40?

I would not use cash, you can begin to build some ST bonds, but I would wait until 2-3 years before retirement.

My plan between retirement and start of SS is to hold 1 years expenses in cash and an additional 2 years expenses in ST bonds.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

JBTX
Posts: 1522
Joined: Wed Jul 26, 2017 12:46 pm

Re: sell high/buy low??

Post by JBTX » Mon Sep 11, 2017 11:28 pm

hacksaw2025 wrote:
Mon Sep 11, 2017 7:46 pm
Hello all,
Here is a snapshot of our retirement/financial picture.
Emergency fund = Do not have one.
Debt = Mortgage 3.75% for 30 years, balance = $118,000, payment = $556/month
No other debt.
Tax filing status: Married filing jointly
Tax rates: 25% federal; State = 7.15%
State of residence = Maine

My wife and I are both 58 years old, and we are both looking to retire at age 65. Besides the savings below, I will receive a pension of approx. 2k/month at age 65. And most likely, we won't need to tap into these accounts until our retirement age.
Here is our situation:
My wife has a 401(k) with Empower and I have a 403(b) with Fidelity. We both have Roth’s with Vanguard.
The 401(k) (roughly $100k) current status: (dollar cost averaging/maxing out the contribution):
The 403(b) (roughly $200k) current status: (dollar cost averaging/maxing out the contribution):
The Roth’s (roughly 10k in each) current status: (dollar cost averaging/maxing out contribution):

Specific combined portfolio percentages:
Small Cap (Vanguard index) 4%
Total US stock (Mix of Vanguard & Fidelity index) 36%
Total International (Fidelity index) 12%
Real Estate (Fidelity index) 12%
Total US Bond (Fidelity index) 32%
Inflation Protected (Fidelity index) 4%
Overall combined portfolio percentages: Stock 64% & Bonds 36%

My question: With retirement, and needing the money in less than 10 years, I have some concerns...As you see, I have nothing in "cash". Should I sell off some stock now with the market being "up" to put into a Fidelity MM? By doing that, I'm thinking it could do two things....make my AA a bit more conservative as well as give me some cash to make future stock purchases when the market makes a correction. Am I thinking too much?? thoughts on the idea?? or do I just stay the course and power forward??
Thank you!!
Hacksaw
While market timing is generally discouraged here, I don't think selling a little bit to get to about 60% stocks and putting that into a short term bond fund is an unreasonable plan, especially given the length of the bull market and historically high valuations. However I don't think I would put it in cash in a retirement account.

Something like this could be appropriate.

http://beta.morningstar.com/funds/XNAS/FGMNX/quote.html

Also/or, you may think about upping your inflation protected index allocation.

venkman
Posts: 293
Joined: Tue Mar 14, 2017 10:33 pm

Re: sell high/buy low??

Post by venkman » Tue Sep 12, 2017 12:26 am

hacksaw2025 wrote:
Mon Sep 11, 2017 7:46 pm
My question: With retirement, and needing the money in less than 10 years, I have some concerns...As you see, I have nothing in "cash". Should I sell off some stock now with the market being "up" to put into a Fidelity MM? By doing that, I'm thinking it could do two things....make my AA a bit more conservative as well as give me some cash to make future stock purchases when the market makes a correction. Am I thinking too much?? thoughts on the idea?? or do I just stay the course and power forward??
Instead of selling, you could gradually move your portfolio toward your desired AA by putting all contributions going forward into bonds (or cash, if you prefer), until your fixed-income percentage gets to where you want it.

Another option is to start taking all the dividends from your stock funds in cash, instead of having them automatically reinvested. Hold on to the cash, or use it to buy more bonds.

That being said, holding cash and waiting for the market to drop is market timing, and is generally not a good idea. Once you get to retirement, there's nothing wrong with holding some cash that you may need to draw on; but until then, high-quality, short-to-intermediate term bonds are fine for the non-equity part of your portfolio.

The Wizard
Posts: 11000
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: sell high/buy low??

Post by The Wizard » Tue Sep 12, 2017 7:53 am

I also like the idea of adjusting your AA back to 60/40 for now, and possibly to 50/50 by the year you retire.
I would not hold excessive cash, except maybe some good CDs in your IRA.

I'm retired 4-1/2 years and keep no more than $10k cash in my checking account. Everything else stays invested...
Attempted new signature...

itstoomuch
Posts: 4689
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: sell high/buy low??

Post by itstoomuch » Tue Sep 12, 2017 11:36 am

We didnt have cash either at your ages, 2007-2009.
I simply reallocated our balanced portfolio into all equity (some of portfolio was used to buy deferred GLWB Variable Annuities, all equity) in 2008-09. This was a market-timing move and was a once in a lifetime, go-for-poverty, nothing-to-lose situation. We were hosed in late 2008 (-40%) and moving into 100% equity portfolio was a logical move to have any chance of recovering our losses by age 65. We lost all our human capital in 2010 (60/63) at which time we took the severance, early SS, and small pension as cash flow. We lived real cheap from 2008-2015.

You are close or in the dreaded Red Zone where a poor sequence of events could really mess up retirement.
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Tue Sep 12, 2017 7:37 pm

livesoft wrote:
Mon Sep 11, 2017 7:49 pm
I'm retired about your ages and have no cash. Equity and bond funds are just fine with me. And you all have a higher bond asset allocation than we do.

I think you are thinking too much.

I could be wrong, too.

See also this about "cash cushion" -> https://earlyretirementnow.com/2017/03/ ... h-cushion/
Thank you for your response and information (i do tend to overthink things)

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Tue Sep 12, 2017 7:39 pm

David Jay wrote:
Mon Sep 11, 2017 8:58 pm
There is nothing wrong with moving some assets from stocks to bonds. How about 60/40?

I would not use cash, you can begin to build some ST bonds, but I would wait until 2-3 years before retirement.

My plan between retirement and start of SS is to hold 1 years expenses in cash and an additional 2 years expenses in ST bonds.
Thanks for your help...again! I appreciate the feedback and insight!

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Tue Sep 12, 2017 7:41 pm

JBTX wrote:
Mon Sep 11, 2017 11:28 pm
hacksaw2025 wrote:
Mon Sep 11, 2017 7:46 pm
Hello all,
Here is a snapshot of our retirement/financial picture.
Emergency fund = Do not have one.
Debt = Mortgage 3.75% for 30 years, balance = $118,000, payment = $556/month
No other debt.
Tax filing status: Married filing jointly
Tax rates: 25% federal; State = 7.15%
State of residence = Maine

My wife and I are both 58 years old, and we are both looking to retire at age 65. Besides the savings below, I will receive a pension of approx. 2k/month at age 65. And most likely, we won't need to tap into these accounts until our retirement age.
Here is our situation:
My wife has a 401(k) with Empower and I have a 403(b) with Fidelity. We both have Roth’s with Vanguard.
The 401(k) (roughly $100k) current status: (dollar cost averaging/maxing out the contribution):
The 403(b) (roughly $200k) current status: (dollar cost averaging/maxing out the contribution):
The Roth’s (roughly 10k in each) current status: (dollar cost averaging/maxing out contribution):

Specific combined portfolio percentages:
Small Cap (Vanguard index) 4%
Total US stock (Mix of Vanguard & Fidelity index) 36%
Total International (Fidelity index) 12%
Real Estate (Fidelity index) 12%
Total US Bond (Fidelity index) 32%
Inflation Protected (Fidelity index) 4%
Overall combined portfolio percentages: Stock 64% & Bonds 36%

My question: With retirement, and needing the money in less than 10 years, I have some concerns...As you see, I have nothing in "cash". Should I sell off some stock now with the market being "up" to put into a Fidelity MM? By doing that, I'm thinking it could do two things....make my AA a bit more conservative as well as give me some cash to make future stock purchases when the market makes a correction. Am I thinking too much?? thoughts on the idea?? or do I just stay the course and power forward??
Thank you!!
Hacksaw
While market timing is generally discouraged here, I don't think selling a little bit to get to about 60% stocks and putting that into a short term bond fund is an unreasonable plan, especially given the length of the bull market and historically high valuations. However I don't think I would put it in cash in a retirement account.

Something like this could be appropriate.

http://beta.morningstar.com/funds/XNAS/FGMNX/quote.html

Also/or, you may think about upping your inflation protected index allocation.
Thank you for your feedback...i appreciate it!

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Tue Sep 12, 2017 7:42 pm

venkman wrote:
Tue Sep 12, 2017 12:26 am
hacksaw2025 wrote:
Mon Sep 11, 2017 7:46 pm
My question: With retirement, and needing the money in less than 10 years, I have some concerns...As you see, I have nothing in "cash". Should I sell off some stock now with the market being "up" to put into a Fidelity MM? By doing that, I'm thinking it could do two things....make my AA a bit more conservative as well as give me some cash to make future stock purchases when the market makes a correction. Am I thinking too much?? thoughts on the idea?? or do I just stay the course and power forward??
Instead of selling, you could gradually move your portfolio toward your desired AA by putting all contributions going forward into bonds (or cash, if you prefer), until your fixed-income percentage gets to where you want it.

Another option is to start taking all the dividends from your stock funds in cash, instead of having them automatically reinvested. Hold on to the cash, or use it to buy more bonds.

That being said, holding cash and waiting for the market to drop is market timing, and is generally not a good idea. Once you get to retirement, there's nothing wrong with holding some cash that you may need to draw on; but until then, high-quality, short-to-intermediate term bonds are fine for the non-equity part of your portfolio.
Awesome! Thank you! I appreciate your feedback!

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Tue Sep 12, 2017 7:43 pm

The Wizard wrote:
Tue Sep 12, 2017 7:53 am
I also like the idea of adjusting your AA back to 60/40 for now, and possibly to 50/50 by the year you retire.
I would not hold excessive cash, except maybe some good CDs in your IRA.

I'm retired 4-1/2 years and keep no more than $10k cash in my checking account. Everything else stays invested...
Great! thanks!

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Tue Sep 12, 2017 7:47 pm

itstoomuch wrote:
Tue Sep 12, 2017 11:36 am
We didnt have cash either at your ages, 2007-2009.
I simply reallocated our balanced portfolio into all equity (some of portfolio was used to buy deferred GLWB Variable Annuities, all equity) in 2008-09. This was a market-timing move and was a once in a lifetime, go-for-poverty, nothing-to-lose situation. We were hosed in late 2008 (-40%) and moving into 100% equity portfolio was a logical move to have any chance of recovering our losses by age 65. We lost all our human capital in 2010 (60/63) at which time we took the severance, early SS, and small pension as cash flow. We lived real cheap from 2008-2015.

You are close or in the dreaded Red Zone where a poor sequence of events could really mess up retirement.
Thank you for sharing your experience! With all due respect, and given some hind-sight, what would you have done differently if given the opportunity?

itstoomuch
Posts: 4689
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: sell high/buy low??

Post by itstoomuch » Tue Sep 12, 2017 8:00 pm

Don't particularly believe in backtesting and hindsight.
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

itstoomuch
Posts: 4689
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: sell high/buy low??

Post by itstoomuch » Tue Sep 12, 2017 10:42 pm

On Your Side:
What are you trying to accomplish?
What is expected retirement income? What is your expected expenses.
What are the variables in your expenses and income? What is fixed expenses in your expenses and income?
What fixed & variables expenses can you control?
What do you want for retirement Income?
For How Long?

On the Other Side:
What is your expectation in the Market? Near, Mid, Long, Very Long terms?
What would happen if the Market doesn't perform to your expectations>Near, Mid, Long, Very Long?
What would happen if the Market does and exceeds perform to your expectations?

I always "benchmarked" my portfolio performance early on to the Dow30; Then later benchmarked to SP500 Index and no other index(es).
I realized that our allocation 60/40, mostly in W funds in later years, would average out to be less than the all equity benchmark and will be less than the benchmark in the long term but at times may beat the Index. The difference in the performance is my drag/fee/insurance for less risk than the Index. IOW, lower performance (the drag/fee/insurance) for less volatility but adequate growth to reach retirement goal and Funded Ratio.

There are always Trade Offs.
YTradeOffsMV :oops:
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

ThrustVectoring
Posts: 239
Joined: Wed Jul 12, 2017 2:51 pm

Re: sell high/buy low??

Post by ThrustVectoring » Wed Sep 13, 2017 1:31 am

Don't try to time the market - it doesn't work. Figure out how much risk you can handle and afford over the short term, and how much risk you need to be compensated for taking over the long term, and come up with an asset allocation that makes sense for you. Then move into that asset allocation ASAP.

It sounds to me like you're taking on too much risk for how close your retirement needs are. Nothing wrong with becoming more conservative because of that - anything between 60/40 and 40/60 is likely fine.

fundseeker
Posts: 630
Joined: Mon Dec 24, 2007 9:02 am

Re: sell high/buy low??

Post by fundseeker » Wed Sep 13, 2017 6:48 am

If it would make you feel like you did something to address your concerns about the high market, but not something very drastic, you could just pull back to 60/40, or just do 62/38 now but also change all of your contributions to just purchase bonds or a money market (so you're not buying high). This would lower your exposure a little, and if there is a crash, you'd take comfort in knowing you did something about your concerns. Good luck!

pkcrafter
Posts: 12094
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: sell high/buy low??

Post by pkcrafter » Wed Sep 13, 2017 8:45 am

Hacksaw, your withdraw rate when you retire will need to be 4% or less, so how much more do you need in accumulated assets to meet that goal considering the pension and SS will help reduce the amount you need to withdraw?

One thing that jumps out here is you have no taxable accounts and no emergency fund. You need an EF to avoid having to pull from retirement accounts if something comes up, so building that in taxable is a top priority. Depending on your circumstances, you might need 2 to 6 months living expenses available.

Your REIT allocation is very high (~19% of equity) compared to most recommendations, which usually run ~10% of equity. .

You are entering the zone where a bad sequence of market returns could upset your retirement plans so maybe dropping the AA to between 50 and 60% equity would be prudent.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Sat Sep 16, 2017 6:02 am

I can respect that...thank you

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Sat Sep 16, 2017 6:03 am

itstoomuch wrote:
Tue Sep 12, 2017 8:00 pm
Don't particularly believe in backtesting and hindsight.
I can respect that...thank you

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Sat Sep 16, 2017 6:05 am

ThrustVectoring wrote:
Wed Sep 13, 2017 1:31 am
Don't try to time the market - it doesn't work. Figure out how much risk you can handle and afford over the short term, and how much risk you need to be compensated for taking over the long term, and come up with an asset allocation that makes sense for you. Then move into that asset allocation ASAP.

It sounds to me like you're taking on too much risk for how close your retirement needs are. Nothing wrong with becoming more conservative because of that - anything between 60/40 and 40/60 is likely fine.
Thank you for your feedback and info...I really appreciate it!

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Sat Sep 16, 2017 6:06 am

fundseeker wrote:
Wed Sep 13, 2017 6:48 am
If it would make you feel like you did something to address your concerns about the high market, but not something very drastic, you could just pull back to 60/40, or just do 62/38 now but also change all of your contributions to just purchase bonds or a money market (so you're not buying high). This would lower your exposure a little, and if there is a crash, you'd take comfort in knowing you did something about your concerns. Good luck!
Great thoughts and advice...thank you!

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Sat Sep 16, 2017 6:13 am

pkcrafter wrote:
Wed Sep 13, 2017 8:45 am
Hacksaw, your withdraw rate when you retire will need to be 4% or less, so how much more do you need in accumulated assets to meet that goal considering the pension and SS will help reduce the amount you need to withdraw?

One thing that jumps out here is you have no taxable accounts and no emergency fund. You need an EF to avoid having to pull from retirement accounts if something comes up, so building that in taxable is a top priority. Depending on your circumstances, you might need 2 to 6 months living expenses available.

Your REIT allocation is very high (~19% of equity) compared to most recommendations, which usually run ~10% of equity. .

You are entering the zone where a bad sequence of market returns could upset your retirement plans so maybe dropping the AA to between 50 and 60% equity would be prudent.

Paul
Hi Paul, you mention building my EF in a "taxable"...What is an example of a taxable account? And, just to be clear, the recommendation is for the REIT to be no more than 10% of my total stock allocation?? in other words, if my total equity is 10k, then my REIT should be no more than 1k? thank you for your help!

Lafder
Posts: 3553
Joined: Sat Aug 03, 2013 7:56 pm
Location: East of the Rio Grande

Re: sell high/buy low??

Post by Lafder » Sat Sep 16, 2017 11:05 am

A "taxable" account is any account that is not a special letter/number retirement account. So there are no special rules for taking money out.

It can be a bank account or any investment account. It is any non "retirement" account. Note taxable accounts can be used for retirement expenses. But they do not have any of the tax advantages of actual labeled retirement accounts. Retirement accounts canalso be called tax advantaged.

But you can plan a taxable account to be as tax advantaged as possible.

Yes it does all get confusing................

I keep my cash in my "emergency fund" in my regular checking account. Keeping a set amount of month's expenses cash allows you to not have to pull money out of investments as urgently.

How many month's cash would you want in an accessible account to be comfortable? Perhaps build up your "emergency funds"

lafder

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Sun Sep 24, 2017 7:54 am

itstoomuch wrote:
Tue Sep 12, 2017 10:42 pm
On Your Side:
What are you trying to accomplish?
What is expected retirement income? What is your expected expenses.
What are the variables in your expenses and income? What is fixed expenses in your expenses and income?
What fixed & variables expenses can you control?
What do you want for retirement Income?
For How Long?

On the Other Side:
What is your expectation in the Market? Near, Mid, Long, Very Long terms?
What would happen if the Market doesn't perform to your expectations>Near, Mid, Long, Very Long?
What would happen if the Market does and exceeds perform to your expectations?

I always "benchmarked" my portfolio performance early on to the Dow30; Then later benchmarked to SP500 Index and no other index(es).
I realized that our allocation 60/40, mostly in W funds in later years, would average out to be less than the all equity benchmark and will be less than the benchmark in the long term but at times may beat the Index. The difference in the performance is my drag/fee/insurance for less risk than the Index. IOW, lower performance (the drag/fee/insurance) for less volatility but adequate growth to reach retirement goal and Funded Ratio.

There are always Trade Offs.
YTradeOffsMV :oops:
Thanks again for the feedback. All the questions you ask are important ones that I need to focus on. Sometimes, I think too much and just simply want my hard earned money to be invested/managed (by me) as most efficiently as possible. Driving myself crazy... I just need to focus on those questions you gave me and keep it simple. And, you referred to "W" funds...what are those??

hacksaw2025
Posts: 31
Joined: Mon Apr 10, 2017 5:05 pm

Re: sell high/buy low??

Post by hacksaw2025 » Sun Sep 24, 2017 8:01 am

Lafder wrote:
Sat Sep 16, 2017 11:05 am
A "taxable" account is any account that is not a special letter/number retirement account. So there are no special rules for taking money out.

It can be a bank account or any investment account. It is any non "retirement" account. Note taxable accounts can be used for retirement expenses. But they do not have any of the tax advantages of actual labeled retirement accounts. Retirement accounts canalso be called tax advantaged.

But you can plan a taxable account to be as tax advantaged as possible.

Yes it does all get confusing................

I keep my cash in my "emergency fund" in my regular checking account. Keeping a set amount of month's expenses cash allows you to not have to pull money out of investments as urgently.

How many month's cash would you want in an accessible account to be comfortable? Perhaps build up your "emergency funds"

lafder
Thank you for the information/clarification! I really appreciate it!

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