Hi everyone,
My wife (38F) and I (38M) are looking for a sanity check on our portfolio allocation as we target early retirement in 12 years (Age 50).
The Numbers:
* Ages: 38 & 38 with an elementary school age child.
* Target Retirement: Age 50 (12-year timeline).
* Household Income: ~$312k Gross (likely to go up by ~$100k within a year or two).
* Annual Spend: ~$165k (includes mortgage on HCOL historic home + childcare) + $12k/yr sinking fund for home repairs.
* Retirement Contributions: ~$100k+ — Max 403b, 457b, HSA, DCP (15% of wife’s salary), when salary comes up, will go back to maxing mega backdoor Roth.
* Projected Income Need in Retirement: ~$160k/yr (Pre-tax).
The Strategy:
We are aiming for a "Bridge" strategy. Since we plan to retire at 50, we need accessible funds to cover us until age 59½ (access to 401k/403b).
* The Bridge (Age 50–60): Taxable Brokerage + University 457(b) (accessible immediately upon separation).
* Long-Term Growth (Age 60+): 403(b), 401(k), Roth IRAs.
* Asset Allocation: Aiming for roughly 90/10 Stocks/Bonds with a 20% International "Hedge" to protect against a US Tech crash.
Current Portfolio (~$1.85M Invested Assets):
| Account Type | Role | Holdings | Value |
|---|---|---|---|
| Cash / Emergency | Liquidity | Cash / Checking | $23k |
| Taxable Brokerage | The Bridge (Age 50-60) | VTI (US Total) / VXUS (Intl) | $164k |
| Taxable Brokerage | Liquidity Tier 2 | FZDXX (Money Market) | $60k |
| Gov I-Bonds | Inflation Bond Tent | Series I Bonds | $23k |
| University 457(b) | The Bridge (Age 50-60) | Domestic / Intl Equity Index | $181k |
| HSA | Health/Growth | VTI | $13k |
| University 403(b) | Deep Storage (Age 60+) | Domestic / Intl Equity Index | $278k |
| University DCP | Deep Storage (Age 60+) | Domestic Equity Index | $343k |
| 401(k) | Deep Storage (Age 60+) | 2050 Target Date Fund | $184k |
| Roth IRAs (2) | Tax-Free Growth | FZROX (US) / FZILX (Intl) | $303k |
| Rollover IRAs (2) | Stability / Growth | FZROX / FXNAX (Bonds) | $276k |
Total Allocation:
* ~70% US Equity
* ~20% International Equity
* ~10% Bonds/Cash
Questions for the Community:
* Bond Tent: given our 12-year horizon, is 10% Bonds/Cash too aggressive? We are comfortable with volatility now, but worried about Sequence of Returns Risk closer to 50.
* Asset Location: We are trying to keep International exposure in Taxable (for credits) and the 403(b) (to force diversification), while keeping the "Bridge" accounts (457b) mostly liquid or growth-oriented. Does this split make sense?
* The "Bridge" Gap: Our Taxable + 457(b) bridge is currently ~$400k. Is this enough to support a 10-year gap (Age 50-60) assuming 12 more years of contributions, or should we stop prioritizing the Roth/403b and dump more into Taxable?
* Any other suggestions or feedback on strategy?
Thanks for the feedback!
edited to include retirement contributions
[38M/38F] $1.8M Net Worth, Targeting FIRE at Age 50. Critique my "Bridge to 60" Portfolio.
byu/Plenty-Royal-3570 infinancialindependence
Posted by Plenty-Royal-3570
7 Comments
Commenting to boost because similar and interested in responses!!
We are in a similar boat, working on getting some real estate cash flowing for the bridge. One of my main concerns is healthcare. If I can find a way to get that covered with a super low impact job, I think that’s the plan
Based on your current annual spend of $177k, you should target a bridge of ~$1.77M to close the gap between 50 (your early retirement target age) and 59.5 years (when you will have access to your tax advantaged accounts). Without knowing your annual contribution amount to the bridge gap, I would consider the bridge gap allocation to be more liquid since those are funds you will need more in near-term (i.e. in 12 years) as compared to your asset allocation in 403(b), 401(k), and IRAs for when you reach 59.5 years of age.
Interested and following
Same
Roth contributions are a good source for bridge.
Rule of 55, RMD’s, 5 year ROTH distribution waiting period, ACA healthcare costs, 35 year average earnings for SS, IRMAA.