You need to think about the point of accumulating this cash. I have never seen anyone give themselves an upper limit on how much to put into taxable equities per year and personally do understand why one would do so. If that $2M is a priority, then absolutely keep the funds for that liquid. But above that, the point of an IPS is to have a plan, preferably one that helps optimize taxes. It is absolutely OK if someone in your shoes gives themselves permission to spend it. But then go spend it!I'm only putting $100k of the cash annually into equities so most of the cash is staying liquid (and that is basically the interest on it). I'm not sure when / how we want to invest the cash. We've been accumulating that for the last 10 years and most of it has come through very recently so haven't fully expected it or known how to handle it. I would not say we've given ourselves free reign to spend from this cash, I think maybe more we've given more reign to spend from anything above this cash level.Not sure why you would put potential house money into equities and funds that are not earmarked into cash. At what point would you go ahead and invest the "everything else to cash" or are you comfortable accumulating that indefinitely? Or perhaps you give yourselves free rein to spend from this cash?
As for the backdoor Roth, if your 401k will accept a reverse rollover, you could empty your respective traditional IRA accounts and start using the backdoor.
Our IPS was basically the order of investments. Keep $X cash, max available tax sheltered accounts, remainder to equities in taxable. Rebalance to 70/30 when doing snapshots (during accumulation, that was every six months to coincide with RSUs, which usually resulted in a sizeable influx to equities).
One suggestion I have seen is to either spend $X by DEADLINE or it goes to charity. I don't think that would work for me, but it is a common suggestion when folks are trying to loosen the purse strings a bit.
Statistics: Posted by sailaway — Sat Jan 04, 2025 3:15 pm