Poll: Tax-Deferred:Taxable Ratio of Investments

[Nick59]

Just curious.

Also interested in hearing if people have any thoughts/strategies as a result of their mix.

Me? I'm sitting at roughly 40:60 (43:57).

 

[73ss454]

I'm sitting about 35% tax advantaged and 65% taxable. My plan is to spend down taxable and if it lasts to 70 switch over tax advantaged. All of this is based on me living that long. (heh)

 

[LOL!]

As long as you have enough tax-deferred space for your fixed income, I don't think it makes any difference what the ratio is. You can always keep the bonds in tax-deferred while spending from taxable equities and rebalancing in tax-advantaged. Or if not enough taxable, you can always do the 72(t) thing if early retired or simply withdraw if age 59.5.

If you don't have enough tax-deferred space for your fixed income, then you have to decide whether to have muni/tax-exempt bonds or not. It will depend on your tax bracket.

In the final analysis, money is money. It doesn't matter to me whether it comes out of my left pocket or my right pocket. Some folks might say, "Oh, the taxes will be different." Yes, but not enough to worry about.

 

[Alan]

I am at 52/48. No conscious decision on this, it is just the way it turned out after years of maxing out to tax advantaged savings first. When we sold the house and became renters then all that money from the house sale had to go into after-tax savings.

As per LOL I have as much of the bond money in tax advantaged accounts that I can.

 

[FIREd]

I am close to 20:80. Mostly because annual contributions to tax-deferred accounts are limited and I didn't work that long.

 

[kyounge1956]

Nick59,
you might also be interested in a similar poll I started last month. It's also about the division between taxable and tax-advantaged accounts, but not as specific as yours.

 

[IBWino]

I selected 30/70, but we're actually at about 35/65 tax deferred/taxable. Same reason as FIREdreamer; we simply can't save enough in tax deferred because of contribution limits. We also had modest windfalls from the sale of a business and real estate.

 

[Bikerdude]

After 10 yrs of retirement I am 100/0. Pretty much as planned.

 

[chinaco]

We are 67:33. Because I restructured the taxable portfolio a couple of times over that last 10 years (selling individual stocks after the tech bubble)... We have a fairly large tax basis.


Intending to use part of the taxable for income before SS begins. I also intend to use it to pay income tax for on TIRA to RIRA rollovers over the next 10 years.... using the ORP method.

 

[MichaelB]

Not enough tax deferred here to round up to 10%...

 

[mickeyd]

Most of our stash is tax deferred so I gussed @ 80/20.

Got a lot of future taxes to pay to a country that needs $$$. I guess I'll be the one that continues to say ~ "I'm doing my part!" as folks continue to bitch about taxes and taxes and taxes.

 

[CyclingInvestor]

About 97% tax-deferred (age 52, retired 4 years), living on 72t distributions funded by dividends from a 100% individual stock portfolio.

 

[BigNick]

100% tax-deferred, because my salary is paid (notionally) "after tax" - in practise, that means tax-free - and my COLA pension will be only half taxed (don't ask, unless you are buying me a beer, and prepared to wait for ten minutes for the explanation).

I have colleagues who have opened the kind of regular IRA that people who pay income tax would go for. They really have no clue.

 

[scrabbler1]

I am close to 70% taxable because I need the dividends to maintain my ER. Just before I stopped working 2 years ago, it was about 70/30 the other way. But I moved about half of my tax-deferred account (company stock) into a taxable account because the tax rates on it were low (NUA, LTCG rates).

 

[audreyh1]

I expect it does affect your strategies - certainly for withdrawals and whether to hold certain investments such as TIPs.

We treat our 10% tax deferred accounts as "gravy" - or maybe as our long-term care insurance, or whatever. We don't plan to touch them until required to do so.

Audrey