I am reviewing some account information and making sure I understand
what is generally recomended.
We have savings for 4 reasons:
1) Emergency fund with 3 months expenses (in a 90 day CD ladder)
2) Retirement (160k, invested in nearly 100% equities)
3) Mortgage paydown fund (invested in PRPFX). This doubles as a
secondary emergency fund, so investment risk is moderate at best.
4) HSA- this is a new one- It finally has enough money to invest (I
need to keep some of it in cash for current medical expenses, and the
rest of it could be invested).
I am trying to wrap my head around 1-3-4. Retirement asset allocation
looks solid. Not sure if I should just keep 1-3-4 in cash, and within
HSA, my thought is to keep 2 years medical expenses in cash, invest
the rest as aggressively as possible. Within mortage paydown fund, I
need to beat a 5.75% interest rate to make that account work for me,
but also like idea of having this money liquid (and not tied up in
equity).
Would you bundle this all into one plan, or keep each pile of money in
a seperate account/ seperate from overall asset allocation?
Probably a 5th thing to consider is college savings for kids, but not
ready to go there just yet (kids are 3 days old).
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