I\u2019m modifying my financial structures, and I wouldn\u2019t mind some thoughts from you smart and beautiful people out in internet land.<\/p>\n\n\n\n
First off, I\u2019ve got a handle on the day to day and month to month finances. I track all expenses in quicken (because it can download straight from the banks and credit cards), and then I\u2019ve got a set of Excel sheets containing monthly budget vs. actual, account balances, and a few other things. After more than 15 years of fighting with them, credit cards are a tool for me to use rather than an onerous weight on my shoulders. I\u2019ve even successfully done the \u201cno interest loan for a year\u201d trick with a couple of cards \u2013 and paid it all the way off.<\/p>\n\n\n\n
Now I\u2019m trying to figure out how the hell I\u2019m going to retire someday. This work thing is a DRAG.<\/p>\n\n\n\n
I break my savings into three tiers:<\/p>\n\n\n\n
* Tier 1: Pre-tax, long term: This is the 401k, the IRA, the Roth, and so on. This is money that is locked up until I\u2019m at least 62 \u2013 or else I pay substantial fees on it. Every analysis I\u2019ve seen indicates that \u2013 if one has the liquidity to do so \u2013 one should absolutely maximize pre-tax savings. Worst case \u2013 you wind up paying the taxes on it to get it out early. Interestingly, some portion of my mortgage payment falls in this category (assuming that the value of my house does not fall to zero) \u2013 since I get a tax deduction on it. The idea of home ownership as \u201cenforced savings,\u201d finally makes sense to me.<\/p>\n\n\n\n
Tier 2: Post-tax, long term: This is money explicitly intended for retirement, but post tax. According to my math \u2013 I need some in this category to meet my goal of retiring prior to age 62.<\/p>\n\n\n\n
Tier 3: Liquid savings: This ought to bottom out around 3 months of expenses (more would be nifty), and what\u2019s above that ought to be available for capital expenditures. Tuition, boats, cars, helicopters, gently used nuclear submarines, diamonds so big that they require a team of eunuchs to carry, that sort of thing. The point is that this is spending money \u2013 but only on things that accrue value.<\/p>\n\n\n\n
What I\u2019m trying to work out is the best way to manage those tiers.<\/p>\n\n\n\n
Tier 1 is broken out for me. My brokerage company has a rollover IRA account \u2013 and while I can trade shares around inside that account \u2013 I can\u2019t easily move money in or out of it. That maintains the pre-tax-ness of that money, which is fine. I\u2019ve also got the current employer\u2019s 401k with another brokerage \u2013 and someday that\u2019ll roll into the IRA.<\/p>\n\n\n\n
I\u2019ve also Tier 3 at the same brokerage company. It\u2019s just a money market account. Like a checking account \u2013 but with interest. Remember savings accounts? It\u2019s one of those.<\/p>\n\n\n\n
The question, I guess, is whether I should just start locking up some of that Tier 3 cash in longer term bonds or something at the same financial institution \u2013 or if I should get an account with Treasury Direct \u2013 or what. My brokerage company can totally do this for me \u2013 and there is a convenience associated with having a single dashboard. On the other hand, I *like* the idea of having an account with the US government for my bonds and treasury bills.<\/p>\n\n\n\n
The other question is whether I ought to be thinking of these as one big pool of investment and diversify the same way in each of them, or if I ought to explicitly use my rollover IRA (for example) for my longest term investments. Re-stated: Is the mix on all three categories the same (because that\u2019s the best mix, right?) or do I balance each of them independently to reflect their various goals.<\/p>\n\n\n\n
Thoughts and references welcomed.<\/p>\n","protected":false},"excerpt":{"rendered":"
I\u2019m modifying my financial structures, and I wouldn\u2019t mind some thoughts from you smart and beautiful people out in internet land. First off, I\u2019ve got a handle on the day to day and month to month finances. I track all expenses in quicken (because it…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50,42],"tags":[],"class_list":["post-1643","post","type-post","status-publish","format-standard","hentry","category-economics","category-real-life"],"_links":{"self":[{"href":"https:\/\/dwan.org\/index.php\/wp-json\/wp\/v2\/posts\/1643","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dwan.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dwan.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dwan.org\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dwan.org\/index.php\/wp-json\/wp\/v2\/comments?post=1643"}],"version-history":[{"count":1,"href":"https:\/\/dwan.org\/index.php\/wp-json\/wp\/v2\/posts\/1643\/revisions"}],"predecessor-version":[{"id":1644,"href":"https:\/\/dwan.org\/index.php\/wp-json\/wp\/v2\/posts\/1643\/revisions\/1644"}],"wp:attachment":[{"href":"https:\/\/dwan.org\/index.php\/wp-json\/wp\/v2\/media?parent=1643"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dwan.org\/index.php\/wp-json\/wp\/v2\/categories?post=1643"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dwan.org\/index.php\/wp-json\/wp\/v2\/tags?post=1643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}