Portfolio Review: 42yo, 1.3% SWR, 80% Concentrated Position, Bond Buffer Advice
Emergency funds: 3 years of expenses in VUSXX (Treasury Money Market).
Age: 42 (Target retirement: 51).
Annual Expenses: 1X (Base unit)
Total Portfolio Value: \~75X annual expenses.
Current Assets:
\* Taxable (Concentrated): \~78% in Berkshire Hathaway (Inherited, high conviction, no current plan to divest).
\* Taxable (Diversified): \~18% in VTI/VXUS.
\* Cash/Cash Equivalents: \~4% in VUSXX.
The Situation:
Current Safe Withdrawal Rate (SWR) of approximately 1.3%. I plan to retire in 9 years. My goal is to build a bond/fixed-income "bucket" to cover years 4 through 10 of retirement (totaling 7X expenses) to mitigate sequence of return risk.
Questions:
\* I am debating between VGIT (Intermediate-Term Treasury) and BND (Total Bond Market) for this buffer. Given that my primary goal is a "flight to quality" ballast during market crashes, is the Treasury focus of VGIT preferred over the corporate exposure in BND?
\* With such a heavy concentration in a single (albeit diversified) ticker, should my fixed income be even more conservative (e.g., Short-term Treasuries)?
\* Are there specific risks to a "Bucket Strategy" for a portfolio of this size and low withdrawal rate that I might be overlooking?
Should I just keep it simple, invest in BND and withdraw from the total portfolio in retirement?