El Ingeniero
Level 2 Member
It's my understanding that Roth contributions can be withdrawn tax and penalty free. I did not know this until yesterday, and I consider it a bit of a game changer.
Since I presently have a sizable emergency fund, I would be able to make a maximum Roth contribution for most of the next decade, as long as my income doesn't bump up against IRS limits.
Goes without saying that I'd be putting no more than 33% of that into equities and the rest into intermediate term bonds.
For the bond allocation, BIV. There is also IEF, but that has a much higher (3X) expense ratio, and is more interest rate sensitive because of its longer average duration.
For the equity allocation, I was thinking PUTW. It puts its funds into short term bonds, and sells at-the-money puts on SPY. Returns are not as nice as SPX or IVV, but it's way less volatile (though I realize it would probably drop just almost as much as SPY).
Am I missing something here?
Since I presently have a sizable emergency fund, I would be able to make a maximum Roth contribution for most of the next decade, as long as my income doesn't bump up against IRS limits.
Goes without saying that I'd be putting no more than 33% of that into equities and the rest into intermediate term bonds.
For the bond allocation, BIV. There is also IEF, but that has a much higher (3X) expense ratio, and is more interest rate sensitive because of its longer average duration.
For the equity allocation, I was thinking PUTW. It puts its funds into short term bonds, and sells at-the-money puts on SPY. Returns are not as nice as SPX or IVV, but it's way less volatile (though I realize it would probably drop just almost as much as SPY).
Am I missing something here?