Xan wrote: ↑
Wed May 20, 2020 2:06 pm
I personally favor having a separate PP in each tax category. In other words, one PP for taxable, another for traditional IRA, and another for Roth IRA.
The IRA money won't/can't be touched for quite a long time. What are everyone's thoughts on dialing back the cash percentage in IRA PPs?
I started my HBPP with the idea of placing a PP in taxable, tax deferred, and tax-free (Roth) each. I have moved away from that concept over time.
I think it is essential to realize that tax efficient placement of HBPP assets is highly personalized. 401k, 457b, T-IRA, Roth IRA, inherited IRA, etc. each have different tax treatment and everyone does not have access to the same type of accounts. The age of the investor matters too.
Most of my stocks (88%) are now in Roth IRAs. Most of my T-bonds are in T-IRA (86%). Cash and gold are both split between taxable and T-IRAs, with a growing portion of Cash in tax deferred savings bonds. This seems most tax efficient for me, but I can see why other investors’ portfolios could differ with their particular circumstances.
I think we are having this discussion in part because interest rates on half of the portfolio are now close to zero, so STT and LTT placement seems increasingly irrelevant.