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Re: Rebalancing taxable vs. tax-exempt/deferred accounts
Old 02-07-2007, 06:51 PM   #21
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Re: Rebalancing taxable vs. tax-exempt/deferred accounts

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Originally Posted by AV8
I'm starting to get it I think. However, as a future military pensioner we've been considering the pension our "fixed income" portion of our portolio (while we're still relatively young at least--late 30s). With the exception of a rental property, we're primarily in equities. If I understand correctly, the thing to consider would be future tax liability of fund positions in the withdrawal phase of RE, not necessarily during the growth phase. Correct?

AV8
Your consideration of the pension as the fixed income allocation is an important point, which I may have missed in your original post. The fact that you are mostly/entirely invested in equities renders my previous comment moot with respect to your specific situation (but still valid for anyone who has a more "normal" asset mix).

In your case, I wouldn't worry too much about which assets go into the tax deferred account. For the same reasons stated earlier, I'd still try to put income producing equities (like REITs or large cap financials) in the tax deferred accounts and leave the growers for the taxable.

More important for you, though, is to maximize your contributions to the tax deferred accounts to take advantage of compounding on your before-tax contributions. Otherwise, I wouldn't worry about it.
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Re: Rebalancing taxable vs. tax-exempt/deferred accounts
Old 02-08-2007, 06:53 AM   #22
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Re: Rebalancing taxable vs. tax-exempt/deferred accounts

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More important for you, though, is to maximize your contributions to the tax deferred accounts to take advantage of compounding on your before-tax contributions. Otherwise, I wouldn't worry about it.
We're doing that, thanks. Maxing the TSP and both Roths every year and also send a good chunk to taxable accounts and a couple of 529s too.

Quote:
In your case, I wouldn't worry too much about which assets go into the tax deferred account. For the same reasons stated earlier, I'd still try to put income producing equities (like REITs or large cap financials) in the tax deferred accounts and leave the growers for the taxable.
The light bulb finally went on last night on income producing assets vs cap gains in tax-deferred and taxable accounts respectively. It still woud be painful to sell the large cap equities in the taxable account, take the tax hit, and reallocate when I could sell them within the Roth without any taxable event. Maybe the Roth's are the answer...put the potential high growers in there.

AV8
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Re: Rebalancing taxable vs. tax-exempt/deferred accounts
Old 02-08-2007, 08:02 AM   #23
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Re: Rebalancing taxable vs. tax-exempt/deferred accounts

I know this is slightly off the subject .I have some bonds in my taxable account .Would it make sense for me to sell them first for expenses and then buy more bonds in my IRA ? Also does it make more sense tax wise to spend the dividends first before selling the bonds ?Thanks!
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