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Which goes in taxable and which in tax deferred?
Posted: Sat May 01, 2010 11:49 am
by Indices
Yet another question for those in the know: What asset classes of the PP are best for a taxable account and which are best for a tax deferred (retirement) account?
Re: Which goes in taxable and which in tax deferred?
Posted: Sat May 01, 2010 7:09 pm
by doug6zj9
Indices wrote:
Yet another question for those in the know: What asset classes of the PP are best for a taxable account and which are best for a tax deferred (retirement) account?
Most people will have non-tax related constraints based on what assets are available in their tax-deferred accounts and how much "space" they have in taxable versus tax deferred accounts.
I say put Bonds and Bills first in the tax deferred, and Gold and Stocks first in taxable. Others will have other opinions.
Re: Which goes in taxable and which in tax deferred?
Posted: Sat May 01, 2010 7:21 pm
by craigr
My order of preference for putting into a tax-shelter:
#1 Bonds/Cash* - Throws off lots of interest that can increase tax bill along with capital gains when sold.
#2 Stocks - Throws off dividends that increase tax bill without increasing value to the investor. Also has capital gains.
#3 Gold - Collectible taxes when sold up to a maximum of 28% depending on your marginal rate. No interest or dividends to shelter.
* Keep some cash outside the tax-shelter to access for emergencies. Some people argue that their gold allocation outside the shelter can be sold down if they need the cash so no need to have cash outside. My only concern with this is the volatility gold can have leaving investors with less cash than they think if the gold market drops.