bots2019
Recycles dryer sheets
- Joined
- May 16, 2007
- Messages
- 128
Recently I’ve been giving some thought to how my domestic/foreign equities are allocated between my various account types. Historically I’ve tried to allocate the highest yielding assets to the retirement accounts in order to minimize taxes since I just end up reinvesting the proceeds anyway (I’m currently 10+ years from retirement). Each of these account types have roughly the same proportion of domestic and foreign assets.
I’m wondering if it isn’t wiser to move more foreign assets into my brokerage accounts since I’m not taking advantage of the foreign tax credit with them in retirement accounts. The problem with this is that the foreign assets have significantly higher yields on average than domestic, so I would end up paying more in taxes. I also don’t necessarily want to end up with retirement accounts full of domestic equities and brokerage accts full of all foreign. It seems most prudent to keep some kind of a balance among accounts (for purposes of future tax and withdrawal strategy).
Just curious how others handle this allocation decision – any thoughts on the best approach to take?
I’m wondering if it isn’t wiser to move more foreign assets into my brokerage accounts since I’m not taking advantage of the foreign tax credit with them in retirement accounts. The problem with this is that the foreign assets have significantly higher yields on average than domestic, so I would end up paying more in taxes. I also don’t necessarily want to end up with retirement accounts full of domestic equities and brokerage accts full of all foreign. It seems most prudent to keep some kind of a balance among accounts (for purposes of future tax and withdrawal strategy).
Just curious how others handle this allocation decision – any thoughts on the best approach to take?