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Balancing a portfolio between retirement and regular account

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Money Talk > Retirement Planning

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agent511
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Balancing a portfolio between retirement and regular account  Reply with quote  

Lets say that for me, an ideal balance would be 50% equities and 50% bonds. And lets say that I have an equal amount of money in my tax protected retirement accounts (IRA's, 401K's) and my non-retirement accounts.

So I could put all the money in my retirement accounts into equities, and all the money in my taxable accounts into bonds. Or visa versa. or 50:50 in each. In all of these scenarios, I would be invested 50% in equities and 50% in bonds.

For tax purposes - which choice is ideal?
Post Thu Apr 06, 2017 3:04 am
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oldguy
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You would put the stocks into your taxable account - that allows you to use the capital gains rate rather than your ordinary tax rate. (Any stocks inside of your 'protected' account will be taxed at the full amount when you sell them, no cap gains benefit).

But - why do you consider 50/50 to be ideal? Seems like a bad idea for someone who is still in their wealth-building years?
Post Thu Apr 06, 2017 3:52 pm
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agent511
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Thanks for great answer. I don't consider 50:50 to be ideal. I am at around 65:35 now (I am 62). I was just trying to make the question simpler!
Post Thu Apr 06, 2017 4:01 pm
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oldguy
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quote:
I am at around 65:35 now (I am 62). I was just trying to make the question simpler!


Good job!
Post Thu Apr 06, 2017 4:06 pm
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