Thank you for the compliment.Of course you are exactly right. And you get bonus points for realizing this yourself through consideration of your own fund placement by account type.Consider a portfolio of $100
You have a Roth with $75 worth of Equities.
You also have a tIRA with $25 worth of Bonds.
On the surface, this looks like a 75/25 AA. But...
The $25 worth of bonds in the traditional account will be taxed at 22% when spent, so that bond allocation is really only worth $19.50. (Due to your joint ownership with Uncle Sam)
Does this mean that your portfolio has a higher effective equity ratio and is therefore more risky than you were targeting?
I ask this because we are getting a relatively high amount of equities in our Roth and our tax-deferred IRAs are more heavily loaded with fixed.
Implementation requires an additional column in the old spreadsheet, for some a bridge too far. You also occasionally see the argument that because we can't know everything with certainty, then it is better to just approach it as if we know nothing about it.
A bridge too far??? I really am enjoying this stuff. It will be interesting 15-20 years down the road to see how well I did at guestimating. Image may be NSFW.
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Statistics: Posted by Workinprogress — Thu Dec 12, 2024 8:28 am — Replies 8 — Views 368
