Would it be worthwhile to somehow have discussion groups divided up as "Taxable PP's" and as "Tax deferred, IRA, 401K PP's"?
It seems sometimes there is confusion within a topic as we seem to lump "taxable" and "IRA" PP's altogether in the same topic.
I may never have a PP outside my IRA and some of you may never have a PP in an IRA. I'm assuming the strategy between how
we invest in the two accounts is slightly different. Best example would be how to hold the gold portion in an IRA vs Taxable. It would
seem how we held the cash portion would be different as well as how often we traded our direct purchased 30 year LTT in a taxable
verses a IRA/401K account.
It sure would help the newbies like me.
Sure seems like it could benefit the entire forum. CraigR, if I have overstepped my bounds, just delete this. My apologies.
Just a thought...
Taxable vs Nontaxable, e.g. IRA, 401k, etc,
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Re: Taxable vs Nontaxable, e.g. IRA, 401k, etc,
Personally, I don't treat them differently. I have multiple PPs, two in tax-advantaged accounts, and two in taxable. I treat them totally the same, except my taxable gold is split between physical bullion the the GTU fund that allows you to bypass the higher collectibles tax.
Some prefer to shelter the income-producing assets in the tax-advantaged accounts for higher tax efficiency, while others prefer to implement mini-PPs within each asset category to ease rebalancing and get a bit more institutional diversification. I don't think there's really a right or wrong way to do it, you just have to set it up in a way that makes sense to you.
Some prefer to shelter the income-producing assets in the tax-advantaged accounts for higher tax efficiency, while others prefer to implement mini-PPs within each asset category to ease rebalancing and get a bit more institutional diversification. I don't think there's really a right or wrong way to do it, you just have to set it up in a way that makes sense to you.
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Re: Taxable vs Nontaxable, e.g. IRA, 401k, etc,
Agreed. PP's are account agnostic, i.e. there's no difference in strategy between PP's in accounts withe different tax treatments.
Mine is spread across multiple accounts with different tax features, both for tax efficiency and because I found it easier to manage. Rebalancing can be done inside tax advantaged accounts to avoid taking a tax hit. Cash is I-bonds and emergency funds in taxable, and short term treasuries in tax-advantaged. I can buy physical gold as I'm able, to offset gold ETFs in tax-advantaged accounts. And, this lets me accommodate an active retirement account with limited investment options. This is where some strategy can come into play. There are issues with safety as well, particularly with respect to gold. However, if you simply buy the ETFs and ignore the fancy stuff, you still have a perfectly good PP.
Mine is spread across multiple accounts with different tax features, both for tax efficiency and because I found it easier to manage. Rebalancing can be done inside tax advantaged accounts to avoid taking a tax hit. Cash is I-bonds and emergency funds in taxable, and short term treasuries in tax-advantaged. I can buy physical gold as I'm able, to offset gold ETFs in tax-advantaged accounts. And, this lets me accommodate an active retirement account with limited investment options. This is where some strategy can come into play. There are issues with safety as well, particularly with respect to gold. However, if you simply buy the ETFs and ignore the fancy stuff, you still have a perfectly good PP.
Last edited by sophie on Tue Sep 11, 2012 10:57 pm, edited 1 time in total.
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Re: Taxable vs Nontaxable, e.g. IRA, 401k, etc,
There are some aspects of coordination between taxable and tax-deferred accounts, but since most people have some combination of the two I don't know that separate discussions would be that useful.
There is some ordering of PP assets between taxable and tax-deferred accounts, but it's not really that big a deal. If you go heavy on bonds in tax deferred space and heavy on gold in taxable space and split the other two assets evenly between the two (or some variant of that basic theme), that's about all you need to do.
Alternatively, you could weight each PP asset equally in your taxable and tax-deferred accounts, and that also works fine. This is a dynamic process, because you will normally have new money going into the portfolio or distributions coming out of the portfolio, plus movements among the assets as their prices fluctuate relative to one another, so it's never going to be a precise sort of thing.
We touch on this topic in the book and discuss the factors one might consider in deciding which assets to hold in taxable vs. tax-deferred accounts.
BTW, welcome to the forum.
There is some ordering of PP assets between taxable and tax-deferred accounts, but it's not really that big a deal. If you go heavy on bonds in tax deferred space and heavy on gold in taxable space and split the other two assets evenly between the two (or some variant of that basic theme), that's about all you need to do.
Alternatively, you could weight each PP asset equally in your taxable and tax-deferred accounts, and that also works fine. This is a dynamic process, because you will normally have new money going into the portfolio or distributions coming out of the portfolio, plus movements among the assets as their prices fluctuate relative to one another, so it's never going to be a precise sort of thing.
We touch on this topic in the book and discuss the factors one might consider in deciding which assets to hold in taxable vs. tax-deferred accounts.
BTW, welcome to the forum.
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