help with asset allocation across multiple account

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bogleboyz
Posts: 64
Joined: Sat May 21, 2016 2:30 am

help with asset allocation across multiple account

Post by bogleboyz » Sun Jun 12, 2016 1:29 pm

Hi
I am new to this forum and would appreciate ur input regarding my portfolio
I am trying to get my financial house in order and would love to get your feedback on my portfolio and the location of the assets

so far i have been using the fidelity freedom funds 2045 fund (FFKGX) (ER 0.64) in my 401k and 457 at fidelity.
I also have roth IRA account for myself and my wife, plus a taxable account at Vanguard. I use the Vanguard personal advisory service for the vanguard accounts (they charge 0.3%). Unfortunately they dont help much with the non-vanguard accounts.

I want to take the money out of the Fidelity freedom funds and use the low cost Vanguard funds in the 401k and 457


Emergency funds: 6 months
Debt: $0
Tax Filing Status: married filing jointly
Tax Rate: 39% Federal, 0% State
Age: 37
Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: 25%
Size of current total portfolio: under Mid six-figures



current balances are as follows
401k =233,404 (35% of total balance)
457 = 76,453 (11.6% of total balance)
my roth IRA = 17,797 (2.7% of total balance)
wife roth IRA = 22,941 (3.5% of total balance)
Taxable vanguard account = 58,247 (8.84% of total balance)

I also have 250,000 in a high yield savings account that i would like to invest over the next one year in my taxable Vanguard account (38% of total balance)

total for all accounts = 658,844

I desire an 80% stock and 20% bonds asset allocation

that comes out to be 20% bonds = 131,768
80% stocks = 527, 075


For stocks i would like a domestic 75% and international 25% distribution (although my Vanguard advisor recommends 40% international)

I would like to know whats the best way to "locate" these funds among the different accounts.

I was thinking about placing the bond portion in the 401 and 457 so here is what i came up with (although i am confused by some people recommending bonds in taxable accounts because of low yields?)

457: invest entire balance of 76,453 in Vanguard Total Bond Market Index Institutional Shares (VBTIX) ER 0.06

401k: invest the remaining bond portion of the portfolio in Vanguard total Bond market index institutional shares 55,315 (131,768 -76,453)

Invest the remaining balance in 401k in stocks which is 178,088
international 25% = 44,522, use FSGDX (fidelity spartan global ex US index fund advantage class, ER net 0.12). I dont have a vanguard international fund available


Domestic 75% =133,566
I was planning to use a combination of VIIIX (Vanguard Institutional Index Fund Institutional Plus Shares, ER 0.02) and VEMPX (Vanguard Extended Market Index Fund Institutional Plus Shares, ER 0.06) in a ratio of 81/19 (i got this ratio from Boglehead forum although i have found some conflicting info on the vanguard site)

VIIIX 81% of domestic = 108, 188
VEMPX 19% of domestic = 25,377

(or should i just use domestic stocks in the 401k and use the international stocks in the taxable account because of foreign tax credit?)

For the vanguard accounts (Roth and taxable) i was going to invest the balance in stocks distributed between international and domestic using the Vanguard total stock market index and Vanguard Total International Stock market index


Should I place the domestic or International stock portion in the taxable account vs the ROth accounts?
I plan on making weekly deposits from the high yield savings account to the taxable account

Future Contributions:
401 k : 18,000 plus employer match of 15,900 for total of 33,900
457: 18,000
roth IRA : 5500 + 5500 (spouse) = 11,000
Taxable account 100,000 per year which i plan on contributing as 2,000 per week


does this strategy in terms of asset "location" make sense.
i am new to this and may be totally missing something obvious.
I would really appreciate your feedback . I am open to suggestions if you think there is a better way to locate these funds.

Thanks a lot
Last edited by bogleboyz on Sun Jun 12, 2016 7:46 pm, edited 3 times in total.

livesoft
Posts: 56586
Joined: Thu Mar 01, 2007 8:00 pm

Re: help with asset allocation over multiple account

Post by livesoft » Sun Jun 12, 2016 1:37 pm

Looks like it makes sense to me.

I would have the Roths about 80% equities and about 20% bonds. That way, when stocks dropped enough, you could use the bonds to buy equities. After equities recovered, you could switch back to 20% bonds. For instance in late Jan/early Feb this year, go from 80:20 to 100:0, then back to 80:20 in late May.

If you still need more bonds after filling 401(k) and 457 with bond funds and doing 80:20 in the Roths, then I would use tax-exempt muni bond fund in taxable account.

Don't forget to do tax-loss harvesting as needed. You should be able to do no-tax rebalancing with such a portfolio, too.
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Lafder
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Re: help with asset allocation over multiple account

Post by Lafder » Sun Jun 12, 2016 1:52 pm

bogleboyz,

It would really help if you list the Expense ratios (ERs) of the current holdings as well as the funds you are proposing. You can go back to your post above and add them.

The Fidelity and Vanguard are relatively simple all in one funds made up of the sub funds you may be proposing holdings. Often the all in one funds have a slightly higher ER to make up for the extra management, but in return they rebalance for you and you only ever have to put money into one fund and pull out of one fund which is simpler. In employer offerings, sometimes the all in one funds have a lower ER than the other individual funds offered. So you need to check the actual ERs.

If you use all in one funds, you can probably pay less in fees than you are paying VG for their PAS.

What are you trying to gain by going to the individual funds?

Are you proposing moving most of your money to the PAS services?

lafder

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BeBH65
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Joined: Sat Jul 04, 2015 7:28 am

Re: help with asset allocation across multiple account

Post by BeBH65 » Sun Jun 12, 2016 2:56 pm

Hi Bogleboyz,

Have a look in the wiki for tax-efficient_fund_placement.
Better even; update your opening post with the additional info as described in this post on asking portfolio questions, then we can help you.

Regards,
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

bogleboyz
Posts: 64
Joined: Sat May 21, 2016 2:30 am

Re: help with asset allocation across multiple account

Post by bogleboyz » Sun Jun 12, 2016 7:41 pm

I have added the ER as requested
I have also added future contributions to the various accounts.

I read in the wiki that International funds should be in taxable because of the foreign tax credit. But the Vanguard personal advisory Service have international stocks in my roth accounts. My Taxable account has only Total stock market index fund. Even when i asked them about it, it seemed like they did not care much about it.

I also read the tax efficient fund placement in the wiki and thats how i came up with this proposed plan.

Thanks a lot

livesoft
Posts: 56586
Joined: Thu Mar 01, 2007 8:00 pm

Re: help with asset allocation across multiple account

Post by livesoft » Sun Jun 12, 2016 7:49 pm

bogleboyz wrote:I have added the ER as requested
I have also added future contributions to the various accounts.

I read in the wiki that International funds should be in taxable because of the foreign tax credit. But the Vanguard personal advisory Service have international stocks in my roth accounts. My Taxable account has only Total stock market index fund. Even when i asked them about it, it seemed like they did not care much about it.

I also read the tax efficient fund placement in the wiki and thats how i came up with this proposed plan.

Thanks a lot

You should also read this link about Foreign Tax Credit and tax-efficiency: viewtopic.php?t=188491

Also, I don't think the wiki says that international funds should be in taxable. It probably says they are OK in taxable. OK, I read the wiki and it doesn't even say international is OK in taxable. It has "… may make it advantageous to prioritize these funds in the taxable account" which is true, but is not the same as "… will make it advantageous …."
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bogleboyz
Posts: 64
Joined: Sat May 21, 2016 2:30 am

Re: help with asset allocation over multiple account

Post by bogleboyz » Tue Jun 14, 2016 1:15 am

Lafder wrote:bogleboyz,

It would really help if you list the Expense ratios (ERs) of the current holdings as well as the funds you are proposing. You can go back to your post above and add them.

The Fidelity and Vanguard are relatively simple all in one funds made up of the sub funds you may be proposing holdings. Often the all in one funds have a slightly higher ER to make up for the extra management, but in return they rebalance for you and you only ever have to put money into one fund and pull out of one fund which is simpler. In employer offerings, sometimes the all in one funds have a lower ER than the other individual funds offered. So you need to check the actual ERs.

If you use all in one funds, you can probably pay less in fees than you are paying VG for their PAS.

What are you trying to gain by going to the individual funds?

Are you proposing moving most of your money to the PAS services?

lafder



I have added the ER as requested
I am going to individual funds to avoid paying the extra fees for the fidelity target retirement fund as i have some low cost vanguard options available in the 401 and 457. Also i believe it will allow me to have more tax efficient placement of funds.
PAS services only manages the accounts with Vanguard. They dont help much with the fidelity 401 and 457.

As i mentioned i have a large balance in a high yield savings account which i plan on investing over the next year in the taxable account at Vanguard.
For now i am planning to keep the PAS service. Once i get more confidence, i may consider dropping it to avoid that extra cost

Thanks a lot
I would appreciate your suggestions

bogleboyz
Posts: 64
Joined: Sat May 21, 2016 2:30 am

Re: help with asset allocation across multiple account

Post by bogleboyz » Tue Jun 14, 2016 1:19 am

livesoft wrote:
bogleboyz wrote:I have added the ER as requested
I have also added future contributions to the various accounts.

I read in the wiki that International funds should be in taxable because of the foreign tax credit. But the Vanguard personal advisory Service have international stocks in my roth accounts. My Taxable account has only Total stock market index fund. Even when i asked them about it, it seemed like they did not care much about it.

I also read the tax efficient fund placement in the wiki and thats how i came up with this proposed plan.

Thanks a lot

You should also read this link about Foreign Tax Credit and tax-efficiency: viewtopic.php?t=188491

Also, I don't think the wiki says that international funds should be in taxable. It probably says they are OK in taxable. OK, I read the wiki and it doesn't even say international is OK in taxable. It has "… may make it advantageous to prioritize these funds in the taxable account" which is true, but is not the same as "… will make it advantageous …."



I understand that the foreign tax credit may not be a huge issue, but i thought if it allows me to take advantage of the foreign tax credit in the taxable, then its reasonable to try placing international stocks in the taxable .

bogleboyz
Posts: 64
Joined: Sat May 21, 2016 2:30 am

Re: help with asset allocation across multiple account

Post by bogleboyz » Tue Jun 14, 2016 1:21 am

BeBH65 wrote:Hi Bogleboyz,

Have a look in the wiki for tax-efficient_fund_placement.
Better even; update your opening post with the additional info as described in this post on asking portfolio questions, then we can help you.

Regards,



I have updated the opening post.
let me know if i have missed anything
I look forward to your suggestions and help
Thanks a lot

bogleboyz
Posts: 64
Joined: Sat May 21, 2016 2:30 am

Re: help with asset allocation over multiple account

Post by bogleboyz » Tue Jun 14, 2016 1:28 am

livesoft wrote:Looks like it makes sense to me.

I would have the Roths about 80% equities and about 20% bonds. That way, when stocks dropped enough, you could use the bonds to buy equities. After equities recovered, you could switch back to 20% bonds. For instance in late Jan/early Feb this year, go from 80:20 to 100:0, then back to 80:20 in late May.

If you still need more bonds after filling 401(k) and 457 with bond funds and doing 80:20 in the Roths, then I would use tax-exempt muni bond fund in taxable account.

Don't forget to do tax-loss harvesting as needed. You should be able to do no-tax rebalancing with such a portfolio, too.



i was planning to place bonds in the 401 and 457 and all stocks in the roth.
i am not familiar with the strategy of using 80:20 stocks/bonds in roth.
do you change the ratio even if your overall portfolio does not need rebalancing? how frequently do you do this?

I am also not very familiar with tax loss harvesting . unfortunately the vanguard personal advisory service does not provide that service.
Do i have to keep records for all the stocks bought and the price per share.

thanks a lot for your suggestions
I really appreciate it

livesoft
Posts: 56586
Joined: Thu Mar 01, 2007 8:00 pm

Re: help with asset allocation over multiple account

Post by livesoft » Tue Jun 14, 2016 8:04 am

bogleboyz wrote:Do i have to keep records for all the stocks bought and the price per share.

Of course you need to keep records. Otherwise, how would you know if you were being ripped off?
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livesoft
Posts: 56586
Joined: Thu Mar 01, 2007 8:00 pm

Re: help with asset allocation across multiple account

Post by livesoft » Tue Jun 14, 2016 8:07 am

bogleboyz wrote:I understand that the foreign tax credit may not be a huge issue, but i thought if it allows me to take advantage of the foreign tax credit in the taxable, then its reasonable to try placing international stocks in the taxable .

In your tax bracket, it could be worse for you to place international stocks in taxable if they bump more tax-efficient assets out of taxable. One should really do the calculations if one is concerned about tax efficiency and paying less taxes. The problem is that conventional wisdom is not always wisdom.
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Lafder
Posts: 3553
Joined: Sat Aug 03, 2013 7:56 pm
Location: East of the Rio Grande

Re: help with asset allocation across multiple account

Post by Lafder » Tue Jun 14, 2016 8:27 am

so far i have been using the fidelity freedom funds 2045 fund (FFKGX) (ER 0.64) in my 401k and 457 at fidelity.

I use the Vanguard personal advisory service for the vanguard accounts (they charge 0.3%). Unfortunately they dont help much with the non-vanguard accounts. ((I do not think it is worth the extra fees. You really can do this yourself!))

I want to take the money out of the Fidelity freedom funds and use the low cost Vanguard funds in the 401k and 457
((Yes this makes sense since you save over 0.5% a year in fees and you can create as good a portfolio that requires just a little "managing" each year on your part))


Desired Asset allocation: 80% stocks / 20% bonds ((This is what we were at your age))
Desired International allocation: 25% ((Vg is rec 30-50% International stocks and bonds. But Bogle himself has said 0% is fine too. Your # is reasonable))
Size of current total portfolio: under Mid six-figures ((Nice!!))


current balances are as follows
401k =233,404 (35% of total balance)
457 = 76,453 (11.6% of total balance)
my roth IRA = 17,797 (2.7% of total balance)
wife roth IRA = 22,941 (3.5% of total balance)
Taxable vanguard account = 58,247 (8.84% of total balance)
((CASH in high yield savings account for investing = $250,000 (38% of total balance)))

total for all accounts = 658,844

I desire an 80% stock and 20% bonds asset allocation

that comes out to be 20% bonds = 131,768
80% stocks = 527, 075


For stocks i would like a domestic 75% and international 25% distribution (although my Vanguard advisor recommends 40% international)
((Yup, they raised their recs to 30-50% International stocks and bonds last year. You can still talk to VG financial advisors if you are not paying for PAS services))

I was thinking about placing the bond portion in the 401 and 457 so here is what i came up with (although I am confused by some people recommending bonds in taxable accounts because of low yields?) ((Generally it is rec to hold bonds in retirement accounts due to the way their returns are taxed))

457: invest entire balance of 76,453 in Vanguard Total Bond Market Index Institutional Shares (VBTIX) ER 0.06
401k: invest the remaining bond portion of the portfolio in Vanguard total Bond market index institutional shares 55,315 (131,768 -76,453)
Invest the remaining balance in 401k in stocks which is 178,088
((Sure that seems fine to me. The main thing for me is to hold stocks and bonds in the same account somewhere so you can rebalance in a big stock market drop. Though in a big stock market crash you can sell some bonds int the 457 and buy stock to get back to your chosen AA))

international 25% = 44,522, use FSGDX (fidelity spartan global ex US index fund advantage class, ER net 0.12). I dont have a vanguard international fund available ((This is the Fidelity International fund that I use))

Domestic 75% =133,566
I was planning to use a combination of VIIIX (Vanguard Institutional Index Fund Institutional Plus Shares, ER 0.02) and VEMPX (Vanguard Extended Market Index Fund Institutional Plus Shares, ER 0.06) in a ratio of 81/19 (i got this ratio from Boglehead forum although i have found some conflicting info on the vanguard site)
((Looks reasonable))

VIIIX 81% of domestic = 108, 188
VEMPX 19% of domestic = 25,377

(or should i just use domestic stocks in the 401k and use the international stocks in the taxable account because of foreign tax credit?)
((Either way))

For the vanguard accounts (Roth and taxable) i was going to invest the balance in stocks distributed between international and domestic using the Vanguard total stock market index and Vanguard Total International Stock market index
((it is fine to use just one holding in smaller accounts and to use larger accounts for rebalancing))

Should I place the domestic or International stock portion in the taxable account vs the ROth accounts?
I plan on making weekly deposits from the high yield savings account to the taxable account
((My Roths are a small % of our holdings and I just hold total stock market for simplicity))

Future Contributions:
401 k : 18,000 plus employer match of 15,900 for total of 33,900
457: 18,000
roth IRA : 5500 + 5500 (spouse) = 11,000
Taxable account 100,000 per year which i plan on contributing as 2,000 per week
((Do you have a mortgage or any debt to pay down? Wow what a nice big savings amount!!))


does this strategy in terms of asset "location" make sense.
i am new to this and may be totally missing something obvious.
I would really appreciate your feedback . I am open to suggestions if you think there is a better way to locate these funds.
((You are doing an amazing job! My main cost saving suggestion is to drop the VG PAS. If you can come up with the above post, you do not need to pay extra for PAS services. I am one of those people who trusts VG and Fidelity to keep track of my cost basis and account values. I do not keep my own paper records. Tax loss harvesting really only needs to happen if there is a drop in account value vs what you paid. As your accounts grow, you may have some opportunity to TLH in down times and you can investigate at those times. My taxable accounts have a low cost basis and I have not bothered to follow the specific share costs to tax loss harvest during down times in a number of years. Some folks will TLH every chance they get))

lafder

bogleboyz
Posts: 64
Joined: Sat May 21, 2016 2:30 am

Re: help with asset allocation across multiple account

Post by bogleboyz » Thu Jun 16, 2016 12:27 am

Lafder wrote:so far i have been using the fidelity freedom funds 2045 fund (FFKGX) (ER 0.64) in my 401k and 457 at fidelity.

I use the Vanguard personal advisory service for the vanguard accounts (they charge 0.3%). Unfortunately they dont help much with the non-vanguard accounts. ((I do not think it is worth the extra fees. You really can do this yourself!))

I want to take the money out of the Fidelity freedom funds and use the low cost Vanguard funds in the 401k and 457
((Yes this makes sense since you save over 0.5% a year in fees and you can create as good a portfolio that requires just a little "managing" each year on your part))


Desired Asset allocation: 80% stocks / 20% bonds ((This is what we were at your age))
Desired International allocation: 25% ((Vg is rec 30-50% International stocks and bonds. But Bogle himself has said 0% is fine too. Your # is reasonable))
Size of current total portfolio: under Mid six-figures ((Nice!!))


current balances are as follows
401k =233,404 (35% of total balance)
457 = 76,453 (11.6% of total balance)
my roth IRA = 17,797 (2.7% of total balance)
wife roth IRA = 22,941 (3.5% of total balance)
Taxable vanguard account = 58,247 (8.84% of total balance)
((CASH in high yield savings account for investing = $250,000 (38% of total balance)))

total for all accounts = 658,844

I desire an 80% stock and 20% bonds asset allocation

that comes out to be 20% bonds = 131,768
80% stocks = 527, 075


For stocks i would like a domestic 75% and international 25% distribution (although my Vanguard advisor recommends 40% international)
((Yup, they raised their recs to 30-50% International stocks and bonds last year. You can still talk to VG financial advisors if you are not paying for PAS services))

I was thinking about placing the bond portion in the 401 and 457 so here is what i came up with (although I am confused by some people recommending bonds in taxable accounts because of low yields?) ((Generally it is rec to hold bonds in retirement accounts due to the way their returns are taxed))

457: invest entire balance of 76,453 in Vanguard Total Bond Market Index Institutional Shares (VBTIX) ER 0.06
401k: invest the remaining bond portion of the portfolio in Vanguard total Bond market index institutional shares 55,315 (131,768 -76,453)
Invest the remaining balance in 401k in stocks which is 178,088
((Sure that seems fine to me. The main thing for me is to hold stocks and bonds in the same account somewhere so you can rebalance in a big stock market drop. Though in a big stock market crash you can sell some bonds int the 457 and buy stock to get back to your chosen AA))

international 25% = 44,522, use FSGDX (fidelity spartan global ex US index fund advantage class, ER net 0.12). I dont have a vanguard international fund available ((This is the Fidelity International fund that I use))

Domestic 75% =133,566
I was planning to use a combination of VIIIX (Vanguard Institutional Index Fund Institutional Plus Shares, ER 0.02) and VEMPX (Vanguard Extended Market Index Fund Institutional Plus Shares, ER 0.06) in a ratio of 81/19 (i got this ratio from Boglehead forum although i have found some conflicting info on the vanguard site)
((Looks reasonable))

VIIIX 81% of domestic = 108, 188
VEMPX 19% of domestic = 25,377

(or should i just use domestic stocks in the 401k and use the international stocks in the taxable account because of foreign tax credit?)
((Either way))

For the vanguard accounts (Roth and taxable) i was going to invest the balance in stocks distributed between international and domestic using the Vanguard total stock market index and Vanguard Total International Stock market index
((it is fine to use just one holding in smaller accounts and to use larger accounts for rebalancing))

Should I place the domestic or International stock portion in the taxable account vs the ROth accounts?
I plan on making weekly deposits from the high yield savings account to the taxable account
((My Roths are a small % of our holdings and I just hold total stock market for simplicity))

Future Contributions:
401 k : 18,000 plus employer match of 15,900 for total of 33,900
457: 18,000
roth IRA : 5500 + 5500 (spouse) = 11,000
Taxable account 100,000 per year which i plan on contributing as 2,000 per week
((Do you have a mortgage or any debt to pay down? Wow what a nice big savings amount!!))


does this strategy in terms of asset "location" make sense.
i am new to this and may be totally missing something obvious.
I would really appreciate your feedback . I am open to suggestions if you think there is a better way to locate these funds.
((You are doing an amazing job! My main cost saving suggestion is to drop the VG PAS. If you can come up with the above post, you do not need to pay extra for PAS services. I am one of those people who trusts VG and Fidelity to keep track of my cost basis and account values. I do not keep my own paper records. Tax loss harvesting really only needs to happen if there is a drop in account value vs what you paid. As your accounts grow, you may have some opportunity to TLH in down times and you can investigate at those times. My taxable accounts have a low cost basis and I have not bothered to follow the specific share costs to tax loss harvest during down times in a number of years. Some folks will TLH every chance they get))

lafder



Thanks a lot for your suggestions. I really appreciate it.
do you have any suggestions about how to invest the future contributions to keep my asset allocation.
I understand that i will have to rebalance as the accounts will grow differently over time

Lafder
Posts: 3553
Joined: Sat Aug 03, 2013 7:56 pm
Location: East of the Rio Grande

Re: help with asset allocation across multiple account

Post by Lafder » Thu Jun 16, 2016 8:45 am

With my accounts, haha, actually "our" accounts since it is mine and my husband's accounts, but easier to think of as mine since I am the only one who deals with them......

I basically set his automatic 401k contributions to our desired AA. But I check a few times a year and can change them if the AA gets off due to market change. There can be a several pay cycle delay in any adjustments, but it is often right away. Currently it is set to our overall desired AA.

With my own contributions to my solo401k, each time I make a contribution I must manually select where it is going. So I look at our overall AA and can put the new money wherever the AA is low, or equally/at our AA if on target.

We recently consolidated a bunch of old accounts at Fidelity (lower ER for solo401k options, plus they allowed old retirement accounts to be rolled into the solo401k which VG did not allow). Because of this our current AA is within our desired range since there has not been enough market shift to change it.

In general, the accounts getting the most new money should be invested at approximately the desired AA so they do not need to be monitored. But in market shifts that may need to be adjusted.

I greatly prefer rebalancing by adjusting contributions versus selling and rebuying.

With our Roths which have the smallest balances, I have kept them just total stock market to keep it simple. I may end up adding a bond or International there if the balance grows enough to matter. So far I have been able to do the major rebalancing in the 401k's and keep the smaller accounts one holding for simplicity.

lafder

bogleboyz
Posts: 64
Joined: Sat May 21, 2016 2:30 am

Re: help with asset allocation across multiple account

Post by bogleboyz » Fri Jun 17, 2016 1:55 am

livesoft wrote:
bogleboyz wrote:I understand that the foreign tax credit may not be a huge issue, but i thought if it allows me to take advantage of the foreign tax credit in the taxable, then its reasonable to try placing international stocks in the taxable .

In your tax bracket, it could be worse for you to place international stocks in taxable if they bump more tax-efficient assets out of taxable. One should really do the calculations if one is concerned about tax efficiency and paying less taxes. The problem is that conventional wisdom is not always wisdom.



do u mind plz explaining how to do the calculations regarding whether its going to be better to place TISM vs TSM in the taxable account?
I am not sure how to determine whats best in my situation. I am in the highest tax bracket of 39%
i would appreciate your input

livesoft
Posts: 56586
Joined: Thu Mar 01, 2007 8:00 pm

Re: help with asset allocation across multiple account

Post by livesoft » Fri Jun 17, 2016 6:32 am

bogleboyz wrote:do u mind plz explaining how to do the calculations regarding whether its going to be better to place TISM vs TSM in the taxable account?
I am not sure how to determine whats best in my situation. I am in the highest tax bracket of 39%
i would appreciate your input

Sure, here it is again from earlier in the thread, you must've missed it:
livesoft wrote:You should also read this link about Foreign Tax Credit and tax-efficiency: viewtopic.php?t=188491
[...]
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bogleboyz
Posts: 64
Joined: Sat May 21, 2016 2:30 am

Re: help with asset allocation across multiple account

Post by bogleboyz » Sun Jun 19, 2016 5:49 pm

livesoft wrote:
bogleboyz wrote:do u mind plz explaining how to do the calculations regarding whether its going to be better to place TISM vs TSM in the taxable account?
I am not sure how to determine whats best in my situation. I am in the highest tax bracket of 39%
i would appreciate your input

Sure, here it is again from earlier in the thread, you must've missed it:
livesoft wrote:You should also read this link about Foreign Tax Credit and tax-efficiency: viewtopic.php?t=188491
[...]



I actually looked at the link you pasted but to be honest i dont think i understand completely the complex discuss in the link. (sorry i am new to this and my understanding is not at your level)
I think i am getting the message that at my tax bracket of 39%, it is better to invest the TSM in taxable and keep TISM in non taxable?
I am not sure how to do my own calculations
thanks a lot once again

livesoft
Posts: 56586
Joined: Thu Mar 01, 2007 8:00 pm

Re: help with asset allocation across multiple account

Post by livesoft » Sun Jun 19, 2016 6:06 pm

bogleboyz wrote:I am not sure how to do my own calculations
thanks a lot once again

The spreadsheet in that link was created by triceratop so that anybody could do the calculation. Maybe triceratop will provide more help.
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bogleboyz
Posts: 64
Joined: Sat May 21, 2016 2:30 am

Re: help with asset allocation across multiple account

Post by bogleboyz » Sun Jun 19, 2016 8:57 pm

livesoft wrote:
bogleboyz wrote:I am not sure how to do my own calculations
thanks a lot once again

The spreadsheet in that link was created by triceratop so that anybody could do the calculation. Maybe triceratop will provide more help.



ok i was able to figure out how to modify the spread sheet.
I changed the info regarding the tax rate to 39.6, state tax to zero and QDI tax rate to 20%
I got for VXUS tax efficiency 0.52 and total expenses 0.64
for VTI i got tax efficiency 0.39 and for total expenses 0.44

as i understand lower is better. so does this mean i am better off holding the TSM in the taxable and TISM in the roth?
thanks once again and i really appreciate your help

(I am unable to upload an image of my excel spreadsheet)

livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: help with asset allocation across multiple account

Post by livesoft » Sun Jun 19, 2016 10:11 pm

bogleboyz wrote:as i understand lower is better. so does this mean i am better off holding the TSM in the taxable and TISM in the roth?
thanks once again and i really appreciate your help

Yes. But the difference is not huge, so it is not that big a deal either.
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