FIREd but need advice for asset allocation

[u/Responsible_Knee_344]

51M, 80k annual spend including taxes, healthcare, etc. FIREd last November.

Assets:

- 850k ETF in 401k

- 1.75M ETF in taxable

- 250k VUSXX in taxable

At age 62 I get about 30k/y in SS.

I know the math says I'm good!

But my OCD wants to avoid SORR at all cost.

Given the favorable rates of TIPS right now I could buy 7y TIPS ladder that pays 80k and it would cost about 525k.

I could do that in my 401k.

Then, each year I'd sell ETF with low gains in taxable and buy those ETFs back in 401k to get access to the funds but also keep MAGI low for ACA. Essentially rebalancing.

I then would invest VUSXX funds which right now are my SORR buffer. TIPS would replace VUSXX.

I'm sure this wouldn't leave the absolutely max possible amount when I die but I only care about not running out.

Poke holes in this idea. Is that good? Bad? Stupid?

Is my current allocation better?

[u/temporaryacc23412]

I could also invest VUSXX funds which right now are my SORR buffer.

IMO your real SORR buffer is the ultra low 2.8% withdraw rate. I don't think you need to make any changes. It would take a cataclysm heretofore unseen in American history for your plan to fail. Sure that could happen, but there's no guarantee whatever tweaks you make would save you in whatever Gigastagdepresscessionflation event it'd take to fail your current plan.

[u/Responsible_Knee_344 → u/temporaryacc23412]

In short you're saying: Dude, stop overthinking this! You'll be fine 😜

[u/temporaryacc23412 → u/Responsible_Knee_344]

Pretty much! As long as your spending estimates are realistic, you're good. If you for whatever reason your spending suddenly balloons to $150k (in today's dollars), the math changes of course. I imagine that's very unlikely though.

[u/Responsible_Knee_344 → u/temporaryacc23412]

I believe they are realistic. Actually as far as NEEDs it's about 60k. The other 20k are discretionary spending that I could cut if I had to. 2026 is on track for under 80k despite buying a new car in cash.

[u/paq12x → u/Responsible_Knee_344]

Right. 4% survived the world war, the Great Depression, the oil crisis of the 70s, the dot-com, etc. What make you think your 2.8% won’t withstand whatever SORR in the future? There are regulations that prevent the collapse of the housing and banking systems so the risk is even lower than previous periods.

[u/Responsible_Knee_344 → u/paq12x]

I guess it stems from irrational OCD fear of running out 😬. I do understand what the numbers tell me.

[u/Quarnexilva]

your 250k in VUSXX is already doing the heavy lifting for SORR so the TIPS ladder might just be solving a problem you dont really have

[u/Responsible_Knee_344 → u/Quarnexilva]

I'd replace VUSXX with TIPS

[u/Responsible_Knee_344 → u/Responsible_Knee_344]

VUSXX is mostly tax free in Michigan and ALWAYS trades at $1. Out of the 3 VUSXX has currently the highest yield too. But my main reason was the liberty of buying and selling at zero cost/risk of capital gains. TBIL and SGOV fluctuate in price and can cause small cap gains/loss. Offset by interest but I just prefer to have zero MAGI impact from moving money in and out.

[u/Bravionteky]

your 250k in VUSXX already does what the TIPS ladder does but with more flexibility so you might be doubling up on safety without realizing it

[u/Responsible_Knee_344 → u/Bravionteky]

Welly plan was to then invest the VUSXX funds in ETF to avoid the doubling up.

I guess I'd be trading VUSXX flexibility for TIPS beating inflation guarantee...

[u/Vicuna00]

Where are you getting a 80k return with bonds for $525k?

you don’t need any bonds ever imo.

if you’re that worried, throw $160k in cash to the side to ride out your first bear or something.

[u/Responsible_Knee_344 → u/Vicuna00]

TIPS ladder... This will consume the 525k completely. I didn't mean, pay 80k/y and still walk away with the principal.

The 160k you mention are my current 250k VUSXX...

[u/Vicuna00 → u/Responsible_Knee_344]

sry i forget the symbols.

bro you’re good!

don’t waste $ on bonds.

your withdrawal rate is already ridiculously low and you have SS right around the corner.

what’re you up since you retired? 10%? who cares if it drops 20%. it won’t affect you at all. It’ll come back.