Author Topic: 401k, Roth IRA, and Taxable -- Asset Allocations?!  (Read 1148 times)

Geographer

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401k, Roth IRA, and Taxable -- Asset Allocations?!
« on: July 20, 2016, 05:36:24 PM »
Hello! I'm new to the community and love the idea of early retirement. I'm a debt-free 26 year old and want to revamp my asset allocations now that I'm maxing out my 401k contributions and Roth IRA, with additional investments in a Vanguard taxable account. Here's my current investment picture:

Taxable Accounts
  • ~$10,000 VTSAX (Vanguard Total Stock Market Index Fund)
  • ~$10,000 VTIAX (Vanguard Total International Stock Index Fund)
Roth IRA
  • ~$10,000 VFFVX (Vanguard Target Retirement 2055 Fund)
401k Pre-Tax
  • ~$45,000 Target Retirement 2055 Fund (BlackRock)

For the Roth IRA, I chose the target retirement fund as a temporary holding until I can shift it to something better. Through some research, I think going all REIT for Roth would be advantageous given the tax-free aspect. But given these three different investment vehicles, how can I best establish a suitable asset allocation? I've always preferred to keep my money in as few accounts as possible for simplicity, but the need to split into these different investment accounts has thrown me for a loop. Should I break up the 401k funds into individual funds (S&P 500 and Bonds) to weight more allocation to bonds, as it appears there are none in my current portfolio?

Any tips or advice for reallocation and investment strategy going forward would be fantastic, thanks in advance!!
« Last Edit: July 20, 2016, 05:52:42 PM by The 585 »

seattlecyclone

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Re: 401k, Roth IRA, and Taxable -- Asset Allocations?!
« Reply #1 on: July 20, 2016, 06:07:02 PM »
You'll have to decide for yourself what percentage of your money you want to put in stocks vs. bonds, domestic vs. international, etc.

As to the question of which account to put each of these in, https://www.bogleheads.org/wiki/Tax-efficient_fund_placement is a good guide.

DrF

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Re: 401k, Roth IRA, and Taxable -- Asset Allocations?!
« Reply #2 on: July 21, 2016, 12:10:22 PM »
You should also read all the madfientist posts on tax efficient investing. Here are just 2 of his articles.

Enjoy!
http://www.madfientist.com/retire-even-earlier/
http://www.madfientist.com/how-to-access-retirement-funds-early/