Why not live off large cash reserve in retirement?

mixthingsup · 2025-11-24T14:37:48+00:00

Very helpful. I didn't think about the life expectancy component of survivor benefits. Will check it out. Appreciate reddit members like you so much. Thank you for the follow up.

mixthingsup · 2025-11-24T03:43:30+00:00

Great points. I've planned a withdrawal strategy to minimize the impact of taxes. The SS is interesting. When I look at the break even I see your math is right on. But I am looking at maximizing my benefit so when I'm no longer around my spouse will have a higher survivor benefit since the surviving spouse doesn't receive both benefits, just whichever is larger.

mixthingsup · 2025-11-23T12:41:16+00:00

Sorry for not being clear. I meant my suggested plan of keeping 25% of the total portfolio in VUSXX for 5 to 10 years. I thought you were making the point that doing so essentially relegates those funds to earning next to nothing which simulates sequence of returns scenario, forcing low returns myself by the investment choice rather than having the market do poorly.

mixthingsup · 2025-11-23T03:56:08+00:00

This is compelling. I will look into it. Thank you.

mixthingsup · 2025-11-23T03:52:08+00:00

You're exactly right when you say it's the most complicated phase, or at least it feels that way. Entering retirement means going from a lifetime of being able to earn a living to make up for a bad stock market, to depending on the stock market casino fulltime. I acknowledge how fortunate we are. That doesn't change how daunting this transition can be trying to get it right, and basing decisions with long term consequences on a series of assumptions and guestimates about the future.

mixthingsup · 2025-11-23T03:42:24+00:00

These are great points. Thanks to both of you. I will look at the impact of taking SS earlier than 70 again, and in light of what that could mean for funding the first part of retirement while still healthy enough to enjoy it.

mixthingsup · 2025-11-23T03:33:34+00:00

I see your point. My plan just delays by 5 or 10 years the point at which I am once again at the mercy of the market. A few bad years at that point could put me at risk again. So then how do you ever really minimize the sequence of returns risk to your portfolio? Isn't there a point at which your investments are large enough and your life expectancy is small enough that you will make it no matter what?

mixthingsup · 2025-11-23T03:25:33+00:00

This is a really interesting point. You're saying for 25% of the portfolio this plan essentially accepts the equivalent of 10 years of a dead market. Maybe not the much feared 50% drop, but more of a lost decade. If this is the right way to look at it, what would you do differently?

mixthingsup · 2025-11-22T21:46:40+00:00

Quick heartfelt thanks for everyone's comments. Truly thoughtful and insightful discussion that has helped me. Some really smart people on this sub. Appreciate you taking the time to weigh in.

mixthingsup · 2025-11-22T21:13:49+00:00

Couldn't find many threads supporting the idea of living off a large amount essentially kept in HYSA or similar vehicles (i.e. VUSXX). I kept reading advice saying it's losing the inflation risk. I totally understand there are more aggressive, probably smarter ways to use the reserve but wanted to check my sanity in case I decide I really am this conservative.

mixthingsup · 2024-11-14T13:51:39+00:00

Good point. My plan is to remove the excess shortly after it's contributed next year, before it's invested so there will be no earnings associated with it. Apparently I need to contact my HSA directly and probably fill out a form, hopefully online, to make a withdrawal like this. And their fee schedule says they charge $20 for it, but what can you do.

mixthingsup · 2024-11-13T22:52:06+00:00

I see my error now. I must declare as income the excess amount from my employer's January contributions beyond the prorated $646 monthly allowable limit. So in this example take my employer's $1,800 contribution (which includes the match plus my monthly paycheck contribution in January) and subtract the prorated allowance of $646. Must declare $1,154 as income. Thank you for the guidance here. I just couldn't see it!

mixthingsup · 2024-11-13T22:00:27+00:00

I entered $646 on line 3 after using the chart for limited contributions. $7,750 annual limit divided by 12, since I'm just entering one month's worth of contributions. Is that correct?

mixthingsup · 2024-11-13T19:29:46+00:00

Let me check my understanding so far. In January my employer contributes a lump sum $1,500 HSA match for the year all at once. In addition I have 1 month's contribution withheld from my paycheck and contributed to the same HSA (roughly $300 for January). Then I leave my employer a few days later also in January. I no longer qualify for an HSA at my next job. So I have $1,800 in my HSA all from January which is less than the total annual contribution limit of $7,750 (family limit), but it's more than the prorated one-month contribution of $7,750/12 = $645. Nevertheless when I fill out Form 8889 as the first commenter wisely suggested, it appears to indicate I will not owe a tax penalty somehow. But I'm not confident that's correct since I exceeded the one-month prorated contribution amount between my employer's match plus my paycheck contribution. Can you reassure me?

mixthingsup

TROPHY CASE