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Is 500K too much in regular savings account?

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  • Is 500K too much in regular savings account?

    Hi, new member here. I've been browsing this site for a while and it's been very helpful! My husband and I are in mid-40s with 2 children . Prior to 2016, most of our income were allotted for the purchase of our family home, cc and school loan payments. Currently, we have:

    Combined rollover IRA = 865K (I wish I had known about the backdoor Roth! I honestly never heard of it until I stumbled upon this site!)
    403 b = 200K
    Brokerage = 344K ( mostly ETFs and low cost index funds)
    Regular Savings Account = 500K

    Home mortgage: 428K (Current Home Value 930K)
    Rental mortgage: 38K (Condo Value 255K)
    We have no other debts. All school loans, car payments, cc debts were paid-off.

    Annual Gross ~ 720K. Strangely, it's only NOW that we're older that we're starting to feel more comfortable with taking more risks with our investments, which I know is probably counterintuitive. What do you guys think?

    Lastly, regarding the 500K in savings.. too much? Should I dump some of it in brokerage? Side note: We're children of immigrants whose parents are highly suspicious of the "stock market.' I went against it and decided to invest. Luckily, my husband was on board.


  • #2
    Yes, it’s too much unless you’ve got a huge purchase coming up that you want to pay cash for.

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    • #3
      You guys have worked hard and saved!!

      Yes that's too much if you ask me! We are in a similar position and keep 50k.

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      • #4
        Also meant to say this before but would just knock the condo mortgage out. To me when it gets to be a about the value of a nice car it's not worth dragging out. Just clear that out. My opinion.

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        • #5
          Yes, way too much.

          Get that down to a five-figure number you’re comfortable with and throw the rest in the brokerage account.

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          • #6
            No worries, only lost 7% this year due to inflation. Unless there is a reason allocated for the cash, def do something productive, it doesnt have to be high risk, but earn something.

            Also would def not pay down mortgage for the same reason, what a waste of inflation and time value of money.

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            • #7
              I forgot to add. Kids’ total 529 plan ~ 400K

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              • #8
                Yes. Extremely so.

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                • #9
                  Way too much! Dump most of it in taxable We also tend to accumulate cash but I have been trying to be better about minimizing that

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                  • #10
                    Definitely way too much cash. You don't have to put it in all equities either. Something like VTMFX (Tax-Managed Balanced Fund) is 50% muni bonds, 50% Russell 1000 is reasonable, assuming you don't need the money in a pinch.

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                    • #11
                      Is that 500k all in one account? If so, you are really close to the FDIC insurance limit of $500k for a joint account.

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                      • #12
                        I would pay off rental debt. Rest to taxable but save some for E-fund (50K?).

                        On the flip side, if you are a little nervous about the stock market you could pay off your mortgages and be debt free. That sounds nice. The best financial move is to invest in taxable. Psychologically, debt free sounds awesome.

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                        • #13
                          While 500k might not be too much for some, it probably is when evaluated along with the rest of your finances.

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                          • #14
                            If employment is secure, $500k is probably way too much. Pay off rental. How much is primary mortgage interest? If lower than 3% might not make sense to pay it off over investing other than for the mental aspect of it.

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                            • #15
                              Efund is max 6 months of spending., 3-6 months is adequate.
                              Put the rest of your financial capital to work.
                              I doubt you are spending $100k per month. Your savings is working against you, fix that. For most the $50k is adequate. Your taxable is accessible and the right spot.

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