% of Funds in Retirement Accounts VS Taxable

General Discussion on the Permanent Portfolio Strategy

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Matthew19
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% of Funds in Retirement Accounts VS Taxable

Post by Matthew19 » Thu Mar 19, 2020 11:46 am

Thinking of poising my 401k contributions -

Is there a ratio that is commonly suggest for retirement accounts vs taxable? I know that a mixture gives you flexibility, but I'm unsure about what's right. At the moment I'm 25% 401k and 75% taxable.
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mathjak107
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Re: % of Funds in Retirement Accounts VS Taxable

Post by mathjak107 » Thu Mar 19, 2020 12:28 pm

It is really a personal issue depending on plan ......such as if I was in the zero capital gains bracket I would shoot for most in a taxable account .....if an aca subsidy or not getting ss taxed is an issue dividends in a taxable account can knock you out of the box
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Matthew19
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Re: % of Funds in Retirement Accounts VS Taxable

Post by Matthew19 » Thu Mar 19, 2020 12:33 pm

We have an LLC S-corp and can adjust our salary a bit to avoid SS tax. Right now it's higher than needed - so we pay more SS tax but can move more to the 401k. I don't know how to calculate if that's work it though.
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Dieter
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Re: % of Funds in Retirement Accounts VS Taxable

Post by Dieter » Thu Mar 19, 2020 1:03 pm

A general rule of thumb if can afford it:
* Max the match in any 401(k) / 403(b)

* Max IRA (can get money out of Roth at any time after 1 year? 5?)

Then depends. :)

Taxable has most flexibility, but, um, taxable.

So it depends on your tax rate and the taxable income generated by your investment.

Tax advantages space does make it easier to switch between investments without having to worry about tax implications, so I think preferred in general if have decent options.
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