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Advice for doing a 75/25 split between various financial accounts
Old 01-16-2018, 05:12 PM   #1
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Advice for doing a 75/25 split between various financial accounts

I've decided on a 75 stock index fund/25 bond index fund portfolio overall.

I have the following investments:
Roth IRA
Individual IRA
403 b - 2 different ones

My question is: How do I allocate based on all of the different accounts?
Should I so a 75/25 split with each account? Or some other way?

Any resources where I could read up on this more?


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Old 01-16-2018, 05:31 PM   #2
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From Boggleheads

Portfolio Construction

After settling on your primary asset allocation you can turn to selecting funds that flesh out your desired asset allocation and placing them in the most tax efficient manner. If you do not have taxable accounts, then tax efficiency isnít a huge concern but it is still a factor that should be considered. It is usually best to consider all of your investments together. If you are married you should usually blend accounts held by both spouses into one unified portfolio.

The best place to start building a portfolio is by making a list of all your current investment accounts and the investments in each account.
Next, start with the account types that offer the most limited investment choices, which are usually 401k and 403b type plans. These plans normally offer limited fund choices, so starting here and building around the best fund choices is often the best idea. Look at all the funds available in your 401k and list the ones with the lowest expense ratio from each category (US equity, international equity, bonds, etc).

Finally, you must consider the tax consequences of investing, especially in taxable accounts. Generally, the most tax efficient way to use your different accounts is (our thanks to Taylor Larimore and David Grabiner for this list):

1. Invest as much as possible in your tax-deferred and tax-free accounts.
2. Put the most tax-inefficient funds in your tax-deferred and tax-free accounts.
3. Use only tax-efficient funds in taxable accounts.
4. If all else is equal, put funds with higher expected returns in tax-free (Roth) accounts in preference to tax-deferred (traditional 401(k), 403(b), traditional IRA) accounts.

Here is a list of securities in approximate order of their tax-efficiency. (Least tax efficient at the top.):
Hi-Yield Bonds
Taxable Bonds
REIT Stocks
Stock trading accounts
Balanced Funds
Small-Value stocks
Small-Cap stocks
Large Value stocks
International stocks
Large Growth Stocks
Most stock index funds
Tax-Managed Funds
EE and I-Bonds
Tax-Exempt Bonds

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Old 01-16-2018, 05:32 PM   #3
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If those are all of your accounts, I would have the Roth be all stocks. The other accounts, I believe, are basically the same in that they are all tax deferred, right? If so, pick the best choices / lowest fees in your 401/403 accounts since you probably have limited choice. Then fill in your own IRA to balance it how you want.
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Old 01-16-2018, 07:26 PM   #4
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If the 403b or 401a offer a stable value fund that pays a decent rate of interest, say 2% or more, then I would load the 25% fixed income component into that stable value fund. Otherwise, fixed income in tax-deferred and all the rest equities.
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403b, index fund, ira distribution, roth ira

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