Rollover IRA [asset class suggestions?]

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Firewatcherdaughter
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Joined: Sat May 01, 2021 8:31 am

Rollover IRA [asset class suggestions?]

Post by Firewatcherdaughter »

Hi. I am new into this forum and just started learning lots about finances and investment so excuse my lack of knowledge if the question seems very silly :) I am 31 yo and my wife is 32. I just opened a traditional IRA and will rollover to Roth IRA. My wife is doing the same. “Can not do direct roth ira.. have to do backdoor as we do not qualify due to high income”. I am putting 6000$ into the IRA and when I roll in over to Roth i am wondering how I should so the asset allocation. I would like to have some REIT in there but not sure what else would be suitable for Roth and what percentage..and whether the forum has any specific recommendations!??
Thanks!
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David Jay
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Re: Rollover IRA [asset class suggestions?]

Post by David Jay »

Welcome to the forum!

Over the years, we have put together a great financial WIKI, here are a few "good reads":

https://www.bogleheads.org/wiki/Boglehe ... philosophy

https://www.bogleheads.org/wiki/Boglehe ... art-up_kit

It is recommended that you view your overall portfolio as a single entity, and then select which products to place in which type of account for tax efficiency. It is really not possible to determine what to hold in a Roth without knowing your overall asset allocation and holdings in other accounts. This link explains which assets should be held in which type of account:

https://www.bogleheads.org/wiki/Tax-eff ... _placement
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
livesoft
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Re: Rollover IRA [asset class suggestions?]

Post by livesoft »

The asset classes that are suitable for your Roth will depend on what you have in the rest of your portfolio and what you want your overall portfolio asset allocation to be. I generally (not always) hold in my Roth IRA: Total US Stock Market index, Small-cap foreign index, small-cap value index, large-cap momentum because I have other accounts to put the rest of my portfolio which by the way will include more of those same 4 asset classes, too.
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Topic Author
Firewatcherdaughter
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Joined: Sat May 01, 2021 8:31 am

Re: Rollover IRA [asset class suggestions?]

Post by Firewatcherdaughter »

Thank you for the responses. So I have a 403b through work which is 100% vanguard instl target retirement 2055 fund. I do not have any brokerage account or any personal 401K or anything like that.
livesoft
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Re: Rollover IRA [asset class suggestions?]

Post by livesoft »

Then I would suggest putting 100% Vanguard Target Retirement 2055 in your Roth IRAs for now.
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Firewatcherdaughter
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Re: Rollover IRA [asset class suggestions?]

Post by Firewatcherdaughter »

Is the purpose of that to duplicate the allocation? I actually was looking to avoid that target date one cause I was told that these ones are usually not the best investment and that I should eventually change that to something else.
I was reading into the boglehead guide to investing that a reasonable allocation for someone my age would be 80% total stock market index fund and 20% total bond market index fund. I just couldn’t find out whether this is a good allocation for Roth ira itself.. i know you should put the least tax efficient investments in Roth..
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Eagle33
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Re: Rollover IRA [asset class suggestions?]

Post by Eagle33 »

FYI: Vanguard Target Retirement 2055 asset allocation (AA) as of 3/31/21 was
89.56% Stocks
9.45% Bonds
0.99% Short-term reserves
Found on Vanguard's VFFVX webpage under the Portfolio & Management tab.

This AA is based on someone that plans to retire in 2055 and live another 25-30 years in retirement. The AA will automatically glide down in equity % over time into early retirement.
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.
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