Take funds from Brokerage to Fund Backdoor IRAs and I Bonds?

[joe189man]

That's the Question

Should we take funds from our brokerage fund (and take loses on the sale of those funds) to open up two new IRAs to start the backdoor roth conversions and open up an I bond account?

we have at least 10 years before we retire

thanks,

[EvenSteven]

Sound like a good plan to me. It would be a very rare case where a taxable account is better than a Roth. And you mentioned can do some tax loss harvesting to get there, so you don't have to worry about any negative tax consequences there.

[achvfi]

Roth conversions make sense to diversify your tax advantaged asset location. But I don't want to deplete taxable completely.

My eventual aim is to reach an even distribution between taxable, Roth and pretax. It just opens up so much flexibility as you withdraw from your portfolio.

Last year congress came close to removing all backdoor Roth conversions. so take advantage of these while they are available. This year I stopped all taxable contributions to fund Roth conversions.

On the other hand ibonds for long term asset location I am not a big fan of. For short term place to park your cash funds for a couple years, yes its a great option.

I don't buy that inflation is here to stay, especially while we have good leadership at the fed.

[harvestbook]

 I will always sell brokerage to do either Roth or trad IRA if it helps the current tax picture, with the expectation that I will also be able to manage taxes on the back end during the withdrawal phase. I don't have experience with backdoor Rothing but taxation is a prime driver of my strategies. I don't ever expect to pay cap gains tax. Of course, a lot depends on portfolio size. Multimillionaires have different goals than I do.

Like achvi, although I fill my iBonds bucket with new money, I wouldn't sell at a guaranteed loss in order to essentially guarantee breaking even over the long term in real terms. I see people front-loading half a decade of iBond gifts as overreacting to recency bias.

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[joe189man]

Thanks for the input
At least we will sell some brokerage assets to fund the IRAs,