Seeking Feedback on My Cash Management Strategy
I’m 5-10 years out from retirement, so trying to build my cash pile/buffer to protect portfolio in down years.
I recently implemented a 3-tier cash strategy.
Any thoughts/recommendations/feedback?
• Tier 1 - Fidelity CMA in SPAXX at about 3.3% (functions like a checking account).
• Tier 2 - HYSA at OpenBank earning 4.0%. Funds (up to $5,000 daily EFT limit) available in 24 hours.
• Tier 3 - Fidelity CMA invested in cash-like high-dividend positions - 20% each of SGOV, CSHI, SCHD, GPIQ, and GPIX. Currently returning about 6.04%. Dividends on all these positions are somehow tax-advantaged. No state tax on SGOV or CSHI, qualified dividends on SCHD, and mostly tax-deferred ROC on GPIQ and GPIX.
If interest rates drop I may shift more cash further up the tiers to earn more interest unless I need the cash soon for a specific reason.