Join Early Retirement Today
View Poll Results: What is the percentage of taxable money in your portfolio?
0 to 10% 19 12.03%
10 to 20% 25 15.82%
20 to 30% 17 10.76%
30 to 40% 16 10.13%
40 to 50% 25 15.82%
50 to 60% 14 8.86%
60 to 70% 12 7.59%
70 to 80% 12 7.59%
80 to 90% 8 5.06%
90 to 100% 10 6.33%
Voters: 158. You may not vote on this poll

Reply
 
Thread Tools Search this Thread Display Modes
Percentage of Taxable Money in Portfolio
Old 01-21-2013, 08:46 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,453
Percentage of Taxable Money in Portfolio

In a concurrent thread, a couple of posters said they wished to have more money in taxable accounts. In my case, due to circumstances, I happen to have a bit more than 30% in after-tax money accumulated over the years.

I thought that I could have done better to shelter more money and to pay less taxes. Then, when I started thinking about ER a couple of years ago, and looked into doing 72t distributions, I discovered that I did not have to, as I could live on the money already mostly taxed.

At this point, my taxable accounts are good enough for 8 years of living expenses, ignoring potential gains/losses. That money will tide me over until I can claim SS or withdraw from 401k/IRA at my discretion, which will open up some options. I counted our Roth accounts as taxable, because they are small and I have not had much gain there to make a difference.
__________________

__________________
NW-Bound is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-21-2013, 09:18 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,538
At the moment, 89.4% of our retirement portfolio is in taxable accounts.

We have additional investments in taxable accounts that we don't count as part of our retirement portfolio.
__________________

__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 01-21-2013, 09:24 AM   #3
Full time employment: Posting here.
 
Join Date: Nov 2010
Posts: 588
Cash and taxable 37%
Tax deferred 37%
Roths 26%
__________________
devans0 is offline   Reply With Quote
Old 01-21-2013, 09:29 AM   #4
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,151
Since you didn't specify in your poll, I assume you want current percentages.

At the risk of being accused of quibbling (who, me?), my after tax % is considerably lower now after 7+ years of retirement than it was when I pulled the plug. Most of that money was used up funding our living expenses prior to age 59.5 and to allow for some Roth conversions.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 01-21-2013, 09:31 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,983
I answered but it's somewhat of a misnomer for some of us. We have 2 IRAs built on non-deductible funds so only the gains will be taxed, and 2 Rollover IRAs that will be fully taxed when we start taking distributions. We sheltered all we could, which was less than I would have liked, though it will all work out fine.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 01-21-2013, 09:31 AM   #6
gone traveling
 
Join Date: May 2012
Location: Fairfax, VA
Posts: 211
I guess we've got ~20% in taxable accounts and ~80% in 401k's/rothIRA's. We still have a ways to go before FIRE though. Building up our post-tax money now for the potential purchase of a new home in the next few years (may or may not keep the current home as a rental, thus we're not sure if we'd have the equity as a downpayment).
__________________
bo_knows is offline   Reply With Quote
Old 01-21-2013, 09:35 AM   #7
Thinks s/he gets paid by the post
photoguy's Avatar
 
Join Date: Jun 2010
Posts: 2,301
Just over 50%. I think it would be easier with a higher percent in taxable as then i wouldn't need to worry about 72t distributions. But the deferred tax benefit is so great, it wouldn't make any sense not to max out retirement accounts.
__________________
photoguy is offline   Reply With Quote
Old 01-21-2013, 09:51 AM   #8
Full time employment: Posting here.
 
Join Date: Jan 2013
Posts: 660
We currently have only about 2% of our investments in taxable stock mutual funds. The possibility of having long term capital gains from this type of investment be taxed at 0% makes it mandatory for us to move more money into taxable accounts, and I am looking into various options to do so.
__________________
karluk is offline   Reply With Quote
Old 01-21-2013, 09:58 AM   #9
Thinks s/he gets paid by the post
Major Tom's Avatar
 
Join Date: Nov 2009
Location: SF East Bay
Posts: 3,130
Currently about 60% in taxable accounts. I'm spending the taxable down first, so presumably that percentage will be quite a bit lower in 5 or 10 years from now.
__________________
ER, for all intents and purposes. Part-time income <5% of annual expenditure.
Major Tom is offline   Reply With Quote
Old 01-21-2013, 09:59 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,873
I have about 67% of my portfolio in taxable accounts, some of which is in muni bond funds which are partly taxable or not taxable at all. (Some of it is in stock funds whose income is in the 0% federal tax bracket.) As an early retiree, I can't tap into my IRA yet (in an unfettered manner), so I need a lot of money in my taxable accounts to generate the income needed to cover my expenses.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is online now   Reply With Quote
Old 01-21-2013, 10:57 AM   #11
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Posts: 1,649
I have 80% in taxable accounts. It just the way it turned out.
__________________
sheehs1 is offline   Reply With Quote
Old 01-21-2013, 11:08 AM   #12
Dryer sheet aficionado
 
Join Date: Jan 2010
Location: Alliance
Posts: 37
Currently our taxable portfolio is 84%.
__________________
gomo is offline   Reply With Quote
Old 01-21-2013, 11:19 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 5,699
Quote:
Originally Posted by NW-Bound View Post
...(snip)...
At this point, my taxable accounts are good enough for 8 years of living expenses, ignoring potential gains/losses. That money will tide me over until I can claim SS or withdraw from 401k/IRA at my discretion, which will open up some options. I counted our Roth accounts as taxable, because they are small and I have not had much gain there to make a difference.
I am guessing that you are doing Roth conversions while spending the after tax money. That's a good tactic.

Running ORP can help a little to show what income streams to draw from. The tax picture is not at all obvious and is difficult to generalize. ORP is not that strong at considering the tax picture.

What I've done is to run TurboTax with various scenarios and created my own tables showing marginal rates. I don't want to let our IRA's grow too much and force large RMD's at the same time as having SS income. So it can be a good thing to pay taxes up to at least the 15% bracket. SS income is not taxed at the state level.
__________________
Lsbcal is offline   Reply With Quote
Old 01-21-2013, 11:43 AM   #14
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
About 80% of our retirement assets are held outside of retirement accounts. When DW retires next year, the plan is to live off the income generated by our taxable assets and leave the tax-deferred stuff alone for now.
__________________
FIREd is offline   Reply With Quote
Old 01-21-2013, 11:43 AM   #15
Full time employment: Posting here.
Accidental Retiree's Avatar
 
Join Date: Feb 2012
Posts: 975
Tax-deferred: ~90%
Taxable: ~8%
Roth: ~2% (We could not contribute for most of our working lives.)

Due to our two-years-earlier-than-expected retirement, we first drew down our after-tax savings for a while, waiting for my pension to kick in at 55.

Because we were a few years away from 59-1/2, later we each started a 72(t) income stream with a portion of our IRAs. We figured that would also help mitigate the RMD/Social Security taxation scenario down the road.

DH turns 59-1/2 early in February, so our plan is to withdraw up to the 15% limit and put it into savings, index funds, psssst Wellesley, whatever.

And I must add, although it has been nearly 34 years, it doesn't seem all that long ago that the two of us were newlyweds, all excited because we had company profit sharing and 401(k) with matching and hey, we could also save money in these cool things called IRAs. Wow! I am so glad we did.
__________________
Accidental Retiree is offline   Reply With Quote
Old 01-21-2013, 01:14 PM   #16
Thinks s/he gets paid by the post
 
Join Date: Feb 2008
Location: Indialantic FL
Posts: 1,202
Roth - 70%
TSP - 29%
Taxable -1%
Pretty much wiped out our taxable investments in year 1 of retirement to use as a down payment for a vacation rental. We do have taxable accounts that we don't consider retirement savings. 2012 opened a vanguard account and have begun making monthly deposits which we will eventually put into a mutual fund or ETF.
__________________
JimnJana
"The four most dangerous words in investing are 'This time it's different.'" - Sir John Templeton
jimnjana is offline   Reply With Quote
Old 01-21-2013, 01:35 PM   #17
Recycles dryer sheets
 
Join Date: Jul 2008
Location: Sacramento area
Posts: 444
I clicked the wrong button... clickede 10-20, shoulda clicked the next hgher. As of today it is 28.1%
__________________
AWeinel is offline   Reply With Quote
Old 01-21-2013, 01:42 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,460
The gal has less than $14,000 in a Roth. Everything else is taxable and taxed. Thankyou and you are welcome America.
__________________
calmloki is offline   Reply With Quote
Old 01-21-2013, 01:58 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,820
Fascinating poll response. There are 10 categories. The 54 responses in the first five hours are spread almost uniformly across them. Most polls with even buckets would show some sort of a bell curve.

Like some others here, we burned off most of our taxable assets early in retirement.
__________________
Independent is offline   Reply With Quote
Old 01-21-2013, 02:03 PM   #20
Full time employment: Posting here.
 
Join Date: Mar 2011
Posts: 534
I noticed that too, interesting.

I'm ~70% taxable, which is convenient considering I'll retire at 44.
__________________

__________________
jon-nyc is offline   Reply With Quote
Reply

Tags
portfolio, taxable


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 11:05 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.