Does Lifestrategy make sense in Roth IRA's

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Cody
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Does Lifestrategy make sense in Roth IRA's

Post by Cody » Sat Jul 29, 2017 8:06 am

As I age I am considering moving to a Lifestratey fund (for a number of reasons.) But currently almost all of our Equity is placed in our Roths and almost all of our bond funds are placed in Tax deferred.

Does it make sense to consider moving to a Lifestratey fund with a 40/60 AA in my situation? So in the end I would have some bonds in taxable and some equity in tax deferred.

Thanks,
cody

aristotelian
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Re: Does Lifestrategy make sense in Roth IRA's

Post by aristotelian » Sat Jul 29, 2017 8:10 am

Absolutely, bonds are fine in Roth, particularly if your Traditional are already full and you need to increase your bond allocation.

indexonlyplease
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Re: Does Lifestrategy make sense in Roth IRA's

Post by indexonlyplease » Sat Jul 29, 2017 8:16 am

I have heard this before to make investment simple in retirement years. Also, easy for wife when the man is gone. I really like the lifestyle and target funds, just makes investing easy.

The one question I would ask is what does someone do in a down market years and needs to take money from investments for income?? With separate funds you can just take from the fixed or bonds funds. If you have the lifestyle or target fund you are selling shares of all.

So I would also like to see this question answered. I would think maybe doing the same in 10 plus years.

Also, are you in retirement now??

I don't think bonds in the Roth IRA are considered taxable. Since you don't pay taxes on dividends.

Cody
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Re: Does Lifestrategy make sense in Roth IRA's

Post by Cody » Sat Jul 29, 2017 8:26 am

Good catch on the "taxable" - Roths are not in "taxable".

Yes I am retired, am "paying" for my own Social Security delay (rather than take SS I'm taking money from our portfolio).

As far as taking money from various funds during down, or up, markets I'm not sure how effective people are at even doing that well. Personal bias is nasty stuff. I would like to think I could pick the right fund to withdraw from but not always, and if thats the case do I hurt my own cause.

Hopefully other will be able to add to that, or correct it.

Best,
cody

Cody
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Re: Does Lifestrategy make sense in Roth IRA's

Post by Cody » Sat Jul 29, 2017 8:32 am

PS - I have not taxable (most went to paying to fund my Social Security.)
cody

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grabiner
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Re: Does Lifestrategy make sense in Roth IRA's

Post by grabiner » Sat Jul 29, 2017 3:30 pm

LifeStrategy and Target Retirement funds are intended to be your whole portfolio, as they manage themselves; you lose the simplicity advantage if you hold these funds in one account and individual funds in other accounts.

Therefore, it makes a lot of sense to use LifeStrategy Conservative Growth in your Roth IRA if you have it, or a similar fund, in your traditional IRA or 401(k).
Wiki David Grabiner

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ruralavalon
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Re: Does Lifestrategy make sense in Roth IRA's

Post by ruralavalon » Sat Jul 29, 2017 3:36 pm

Cody wrote:As I age I am considering moving to a Lifestratey fund (for a number of reasons.) But currently almost all of our Equity is placed in our Roths and almost all of our bond funds are placed in Tax deferred.

Does it make sense to consider moving to a Lifestratey fund with a 40/60 AA in my situation? So in the end I would have some bonds in taxable and some equity in tax deferred.

Thanks,
cody
Yes, I think that makes sense.

With everything in tax-advantaged accounts, there is little downside to using the fund unless you strongly disagree with the asset allocation in a LifeStrategy fund. A good balanced index fund does greatly simplify portfolio management as you age.

I am thinking along the same lines as we get older.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

delamer
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Re: Does Lifestrategy make sense in Roth IRA's

Post by delamer » Sat Jul 29, 2017 3:42 pm

An advocate for not using Target Date or other all-in-one funds once withdrawals begin:

"Even though I love target-date funds for accumulators,” says Christine Benz, director of personal finance at Morningstar, “most all-in-one funds are suboptimal when it comes to retirement withdrawals because the investor doesn’t have discretion over where those withdrawals come from.”

retiredjg
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Re: Does Lifestrategy make sense in Roth IRA's

Post by retiredjg » Sat Jul 29, 2017 3:43 pm

I think it makes fine since to hold a LS or TR fund in both accounts.

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