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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: dave__ on October 16, 2015, 01:53:43 PM

Title: Bonds in tax-advantaged, yes. But does it matter Roth vs. Traditional IRA?
Post by: dave__ on October 16, 2015, 01:53:43 PM

I am in the process of moving all my accounts away from my Ameriprise advisor and into Vanguard so I want to get everything setup correctly from the get-go.

Wife and I each have Roth IRAs and Traditional IRAs - does it make a difference which accounts I place the bond portion of our asset allocation in?

Thanks!

Title: Re: Bonds in tax-advantaged, yes. But does it matter Roth vs. Traditional IRA?
Post by: seattlecyclone on October 16, 2015, 02:24:11 PM

You expect to earn a lower return on your bonds over the long run, so you may want to prefer to put them in your traditional IRA to reduce your future tax burden, and load up the Roth with investments that are more likely to see long-term growth.

Title: Re: Bonds in tax-advantaged, yes. But does it matter Roth vs. Traditional IRA?
Post by: dave__ on October 16, 2015, 03:03:52 PM

Quote from: seattlecyclone on October 16, 2015, 02:24:11 PM

You expect to earn a lower return on your bonds over the long run, so you may want to prefer to put them in your traditional IRA to reduce your future tax burden, and load up the Roth with investments that are more likely to see long-term growth.

I like your logic, thank you.