Well, these guys (Money Management Educators) came to my place of employment and gave their one hour "Tax Favored Investing" seminar. Interesting. The guys are financial professionals doing this on a volunteer basis and supposed not selling anything. Big part of the presentation is the "Macro Asset Perspective", here's a pdf.
Here's my take-away:
Any words of wisdom here? How is this approach, it is valid? How in the heck would you get there, are they fishing for Roth IRA conversion commission?
Here's my take-away:
- Keep your assets split 50:50 between tax-deferred and taxable. This is the "horizontal diversification" Assumptions that tax rates may be lower when you retire may not be true. By splitting the assets, you have more flexibility. This made sense to me.
- Set the asset allocation or "vertical diversification" based on age. No problem here.
- Keep the equities (risk) in the tax-deferred accounts and the lower risk (income) in the taxable accounts. Thinking is that then you take half your distribution each year from each vertical part (Half taxable and half not), and this can reduce your total tax load. Seeing that I'm practically the opposite (at 53 years old), with most of the bonds in the tax-deferred to reduce my current taxes, this was a shocker.
Any words of wisdom here? How is this approach, it is valid? How in the heck would you get there, are they fishing for Roth IRA conversion commission?