Percentage of Taxable Money in Portfolio

[obgyn65]

More than 90%.

 

[Aiming_4_55]

I might be reading this wrong, but I consider everything for retirement other than my primary residence and 529 accounts. If it came down to it, we could downsize our residence for more retirement funds and 529 account could be shifted if life happens. It really would be a crisis for us to not use 529 funds for our kids' education, but that's a good 12 years away.

28% Taxed
34% TIRA/Roth/HSA
38% Investment Real Estate

So should I answer the poll with 28% or 66% (28% + 38%)? I'm not good with polls!

 

[NW-Bound]

And most of us are not good at making polls!

The motive for my question was to see how much a retiree he can tap at his discretion without paying taxes and penalty. This is important for an early retiree who must live off his savings, has not yet gotten SS, and cannot tap his IRA/401k until he reaches 59-1/2 without going through the straight-jacketed 72t. That would be me.

Another reason was that people who get less than $90K/yr from qualified dividends and cap gains get a free ride on the income tax, but if one has no or little taxable accounts, he cannot make use of this "generosity". Again, I am lucky to make use of a bit of that.

What is interesting is that because our tax laws are so complicated, there are more than just two simple types of assets as I originally thought of in my simplistic model.

If I have any investment RE and need to liquidate it to survive, the basis will not be taxed, but the cap gain will be. If this taxable cap gain is exempted from taxes for people under the $90K/yr income, then it would be like the stocks in my brokerage accounts. I do not know if the rent thrown off that RE gets good treatment like my stock dividends, but it probably does not. So, is investment RE just like taxable accounts, or just somewhat like it?

Gosh! See how people getting the same income can pay all different taxes, depending on the source?

 

[Aiming_4_55]

If I have any investment RE and need to liquidate it to survive, the basis will not be taxed, but the cap gain will be. If this taxable cap gain is exempted from taxes for people under the $90K/yr income, then it would be like the stocks in my brokerage accounts. I do not know if the rent thrown off that RE gets good treatment like my stock dividends, but it probably does not. So, is investment RE just like taxable accounts, or just somewhat like it?

Gosh! See how people getting the same income can pay all different taxes, depending on the source?

I'm not a CPA, but I believe at the current moment, the RE gain would be taxed at a higher rate than your stocks, unless 1031 exchange is used or passed on to the kids. Also, in the future I might make the property my personal residence for a few years, then sell. Everything is subject to change

For us, if things remain the same, the real estate net income will cover 95% of our retirement budget putting limited impact on taxed and tax deferred savings. It'll be my part time job, after I drop my full time job.

Ok - I voted 20 - 30%.

 

[audreyh1]

I faced a lot of barriers to putting money in tax-deferred accounts. Shortly after I was doing well enough to max out my 401K, there were limits on how much the higher-paid employees could put in their 401K. And thereafter I didn't qualified for a tax-deferred IRA either, let alone for a Roth IRA when they came along. So, I saved as much as I could after taxes - I had no choice.

And my stock options were bought with after tax money then that was all she wrote........

 

[devans0]

Cash 10.2%

Taxable 26.4%

Roth 26.2%

Tax Deferred 37.2%

I have hit it right (nearly). Social security, pension, and 5% draw on tax deferred will put me to the top of 15% tax rate. The rest is taxed at ltcg or is in a Roth. After the rates that I have been paying, I am amazed.