Poll: Your Portfolio Tax Diversification

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What does your portfolio tax diversification look like?

Traditional Only
4
3%
Roth Only
2
2%
Taxable Only
2
2%
Equally Split Traditional/Roth/Taxable
1
1%
50/50 Traditional/Roth
1
1%
50/50 Traditional/Taxable
9
8%
50/50 Roth/Taxable
0
No votes
75/25 Traditional/Roth
15
13%
75/25 Traditional/Taxable
4
3%
75/25 Roth/Taxable
3
3%
75/25 Roth/Traditional
3
3%
75/25 Taxable/Traditional
6
5%
75/25 Taxable/Roth
3
3%
50/25/25 Traditional/Roth/Taxable
11
9%
50/25/25 Roth/Traditional/Taxable
4
3%
50/25/25 Taxable/Traditional/Roth
6
5%
50/30/20 Traditional/Roth/Taxable
9
8%
50/30/20 Roth/Traditional/Taxable
0
No votes
50/30/20 Taxable/Traditional/Roth
10
8%
None of the above is close to what I hold (answer in comments)
27
23%
 
Total votes: 120

Topic Author
Choy
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Poll: Your Portfolio Tax Diversification

Post by Choy » Wed Dec 10, 2014 2:13 am

Interested to know what the general tax diversification of everyone's portfolio looks like.

When responding, please use the following definitions:

"Traditional" is any money inside of a pre-tax tax-advantaged account such as a Traditional 401K, SEP-IRA, or Traditional IRA. It doesn't matter if some or all of your contributions were actually pre-tax or post-tax dollars.

"Roth" is any money inside of a post-tax tax-advantaged account such as a Roth 401K or Roth IRA.

"Taxable" is anything outside of a tax-advantaged account.

Please select the option that is closest to your actual allocation.

Ignore any assets in your totals that do not fall into these categories (i.e., real estate, gold).

livesoft
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Re: Poll: Your Portfolio Tax Diversification

Post by livesoft » Wed Dec 10, 2014 2:28 am

44% Taxable
52% Traditional
04% Roth

I guess closest might be 50/50 Taxable/Traditional?
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Topic Author
Choy
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Re: Poll: Your Portfolio Tax Diversification

Post by Choy » Wed Dec 10, 2014 2:35 am

livesoft wrote:I guess closest might be 50/50 Taxable/Traditional?
Correct, that would be the closest option. Unfortunately there aren't enough possible choices when creating a poll to capture everything. Hoping that these choices allow for at least a very high-level summary of how people are diversified.

bcjb
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Re: Poll: Your Portfolio Tax Diversification

Post by bcjb » Wed Dec 10, 2014 2:43 am

I selected 50 taxable/30 trad/20 Roth in the poll, but Roth is closer to 10% than to 20%.
Last edited by bcjb on Wed Dec 10, 2014 3:16 am, edited 1 time in total.

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jidina80
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Re: Poll: Your Portfolio Tax Diversification

Post by jidina80 » Wed Dec 10, 2014 2:56 am

I answered 'none of the above.'

My portfolio is approximately 30% taxable, 55% traditional IRA and 15% Roth. Retired & spending down.

Angst
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Re: Poll: Your Portfolio Tax Diversification

Post by Angst » Wed Dec 10, 2014 3:28 am

I'm 60-20-20, taxable, trad, Roth, so I went for 50-25-25, not a bad approximation. However, in hindsight... with about 10 more buttons added, the poll could have been designed to simply allow us to pick deciles for each of the three categories. Just a thought. Visions of normal curves...

Workinghard
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Re: Poll: Your Portfolio Tax Diversification

Post by Workinghard » Wed Dec 10, 2014 4:56 am

Interesting because I had no idea. I have been trying to simplify, do in-service rollovers, and organize info to make it easier when I do the, ahem, portfolio post and retirement questions.

Looks like we're around 19 taxable, 63 traditional, and 17 Roth. Not sure how that will change in the future with maxing out traditional, Roth, and contributing approximately 2K taxable. Course that will probably be only for another year or so until my husband retires and we start doing conversions.

Percentage wise are we in a good position or not? Or let me guess, that question cannot be answered without more information. :oops:

TPS_Reports
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Re: Poll: Your Portfolio Tax Diversification

Post by TPS_Reports » Wed Dec 10, 2014 5:17 am

I selected the closest option as well, the actual breakdown is closer to 65% Traditional, 25% Taxable, 10% Roth

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mhc
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Re: Poll: Your Portfolio Tax Diversification

Post by mhc » Wed Dec 10, 2014 9:50 am

Since you asked for portfolio and not retirement portfolio, I answered 50/50 taxable/traditional, but it actually is:

45% Taxable
40% Traditional (401k, NQDCP)
10% Roth (Roth IRA, 529, Coverdell)
5% never taxed (HSA)

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Toons
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Re: Poll: Your Portfolio Tax Diversification

Post by Toons » Wed Dec 10, 2014 9:58 am

Traditional 52%
Roth 10%
Taxable 38%
:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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swimirvine
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Re: Poll: Your Portfolio Tax Diversification

Post by swimirvine » Wed Dec 10, 2014 10:03 am

63% Roth
25% Traditional
12% Taxable

I recently did a large Roth conversion since we switched retirement plans

Based on how I'm investing my money currently with the Mega-Back Door Roth. We should retire in around 25 years with:

45% Roth
25% Traditional
30% Taxable

Aggressive Roth investing for two reasons:

1. Plan on having higher income in retirement
2. Plan on retiring in higher tax State
The way I invest my money is not the right way to invest, it's the right way for ME to invest.

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Artsdoctor
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Re: Poll: Your Portfolio Tax Diversification

Post by Artsdoctor » Wed Dec 10, 2014 10:14 am

Interesting, but I suspect there will be innumerable variations. Don't forget about inherited tax-sheltered accounts.

65% taxable
25% tax-deferred
5% Roth
5% Inherited Roth

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midareff
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Re: Poll: Your Portfolio Tax Diversification

Post by midareff » Wed Dec 10, 2014 10:19 am

43% traditional, 52% IRA, 3% Roth, 2% cash. .. 67 and retired.

FuzzyButtons
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Re: Poll: Your Portfolio Tax Diversification

Post by FuzzyButtons » Wed Dec 10, 2014 10:47 am

I picked "Traditional Only", though I do have about 10% in Roth contributions. So, 90/10 would be the best pick if it was there. I'm surprised I was the first to pick this option, since I figure most people who have investments just use the company provided 401(k). Obviously, bogleheads are more dedicated and sophisticated investors - but still, it can't just be me.

I've actually been planning out my time to retirement from now (44) and figure the ratio will stay about that. With my current salary (72k) I can just barely max out my tax-advantaged space. I don't expect any significant raises in the future. I'll have some extra cash to invest after the mortgage is paid off at 48, but then at 50 the IRA and 401(k) limits go back up again. My spending is low and I'm very likely to be in a 15% bracket all through my retirement, so right now I just can't find a convincing reason to pass up the chance to avoid the 25% marginal rate I currently have. I figure even if I end up forced into early retirement and have to pay the 10% penalty, I still come out even.

RunningRad
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Re: Poll: Your Portfolio Tax Diversification

Post by RunningRad » Wed Dec 10, 2014 10:48 am

I voted 50/25/25 Taxable/Traditional/Roth,

but it is probably closer to 55/35/10
Few decisions in life motivated by greed ever have happy outcomes--Peter Bernstein, The 60/40 Solution

JohnF
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Re: Poll: Your Portfolio Tax Diversification

Post by JohnF » Wed Dec 10, 2014 11:46 am

Currently:
Roth 16%
Tax Deferred 59%
Taxable 25%

I convert roughly 2% per annum to Roth for heirs. Start RMD’s in 2016 which will not be pleasant.

MichDad
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Re: Poll: Your Portfolio Tax Diversification

Post by MichDad » Wed Dec 10, 2014 12:19 pm

Tax Deferred ~ 66%
Roth ~ 27%
Taxable ~ 7%

My wife and I are about 3 years away from retirement. We're hoping to go into retirement with about 33% of our portfolio in Roth accounts. In the early years of retirement, we'll probably make some Roth conversions to increase that percentage even further. The taxable account percentage will also probably increase when we sell our house in retirement and downsize. But some of that money will probably be used to help fund Roth conversions.

MichDad

placeholder
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Re: Poll: Your Portfolio Tax Diversification

Post by placeholder » Wed Dec 10, 2014 1:15 pm

The most recent numbers I have handy (from October) are:
38.09% Taxable
16.99% Roth
44.93% 401k (deferred)

chaz
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Re: Poll: Your Portfolio Tax Diversification

Post by chaz » Wed Dec 10, 2014 1:19 pm

100% traditional IRA. :moneybag
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page

randomguy
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Re: Poll: Your Portfolio Tax Diversification

Post by randomguy » Wed Dec 10, 2014 1:30 pm

something like 85/10/5. Taxable/401(k)/Roth. These numbers are going to be pretty much driven by income levels. When you saving 20k/yr it is easy to get it all in tIRA/roths. When you saving 400k/yr, you end up with a ton of taxable.

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tludwig23
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Re: Poll: Your Portfolio Tax Diversification

Post by tludwig23 » Wed Dec 10, 2014 1:38 pm

I picked 75 trad/ 25 Roth, but have about 6% in HSA, and enough medical expense receipts to cover half of that. So the HSA money is sort of Rothy, in a way.
That's what I do: I drink, and I know things. --Tyrion Lannister

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Dale_G
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Re: Poll: Your Portfolio Tax Diversification

Post by Dale_G » Wed Dec 10, 2014 4:16 pm

I am presently 63% taxable, 34% Traditional IRA and 3% Roth IRA.

But when I retired in 2001, I was 18% taxable, 82% tax deferred and Roth = zero.

The big switch in taxable/deferred was caused by equities in taxable doing well, the bond component in the IRA/401k doing okay, and a lot of forced distributions resulting in movement of money from deferred to taxable.

I did a small amount of conversion from Traditional to Roth, but I think the only beneficiary is the US Treasury. Roth conversions appear to be totally impractical now.

As time goes on, the deferred account will continue to shrink because required distributions exceed the likely income. The taxable account? Nobody knows nuthin.

Dale
Volatility is my friend

Crow Hunter
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Re: Poll: Your Portfolio Tax Diversification

Post by Crow Hunter » Wed Dec 10, 2014 4:26 pm

16.72% Taxable
6.62% Roth
76.66% Traditional

As of close of business yesterday. (I just updated my spreadsheet this morning) :D

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abuss368
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Re: Poll: Your Portfolio Tax Diversification

Post by abuss368 » Wed Dec 10, 2014 4:34 pm

Roth, Taxable, and Tax Advantaged.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

gkaplan
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Re: Poll: Your Portfolio Tax Diversification

Post by gkaplan » Wed Dec 10, 2014 7:11 pm

My portfolio is approximately 70% Roth IRA, 30% TSP Traditional, so I chose 75/25 Roth/Traditional.
Gordon

Sagenick48
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Re: Poll: Your Portfolio Tax Diversification

Post by Sagenick48 » Wed Dec 10, 2014 7:18 pm

63/35/2. Tax deferred, taxable, roth. Doesn't include other forms for tax deferred.
The market goes up, the market goes down.

pascalwager
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Re: Poll: Your Portfolio Tax Diversification

Post by pascalwager » Wed Dec 10, 2014 7:24 pm

I voted "None of the Above" as I have a large VA.

Taxable 45%
ROTH 4%
Traditional IRA 22%
VA 28%

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Doc
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Re: Poll: Your Portfolio Tax Diversification

Post by Doc » Wed Dec 10, 2014 7:31 pm

Well so far the old farts fogies like me are in the minority with only 9% having a 75% taxable portfolio. I am beginning to understand why there is so little interest in my rants about the complexities of the tax code w/r/t SS. :D
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

fposte
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Re: Poll: Your Portfolio Tax Diversification

Post by fposte » Wed Dec 10, 2014 11:55 pm

I'm about 70% taxable, 25% tax deferred, and 5% Roth. Was kind of interesting to figure it out--I hadn't realized how much I'd bumped up the tax-deferred in the last few years.

letsgobobby
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Re: Poll: Your Portfolio Tax Diversification

Post by letsgobobby » Thu Dec 11, 2014 12:05 am

40% taxable
40% pre-tax
20% tax nirvana (HSA and Roth)

I voted "nothing close"

cfpyne
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Re: Poll: Your Portfolio Tax Diversification

Post by cfpyne » Thu Dec 11, 2014 12:31 am

70/15/15 Taxable/Traditional/Roth

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elgob.bogle
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Re: Poll: Your Portfolio Tax Diversification

Post by elgob.bogle » Thu Dec 11, 2014 12:33 am

Approximately 47.5% Traditional IRA, 47.5% ROTH IRA & 5.0% Taxable. This will change in January 2015 when I roll the last (7.5% of Portfolio) of my Traditional IRA into my ROTH IRA. The end result will be about 40% Traditional IRA, 55% ROTH IRA, 5% Taxable.

elgob

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Noobvestor
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Re: Poll: Your Portfolio Tax Diversification

Post by Noobvestor » Thu Dec 11, 2014 12:43 am

Mostly taxable, some traditional and a little Roth. Wish it were otherwise - in a perfect world I'd be mostly Roth, some traditional and a little taxable (i.e. the reverse of what I am now).
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

Bill M
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Re: Poll: Your Portfolio Tax Diversification

Post by Bill M » Thu Dec 11, 2014 1:13 am

The trouble is this isn't under our control, like asset allocation is. I'd love to move all my taxable accounts to Roth, but rules get in the way. Likewise there is a high cost to move traditional IRA to Roth. So its hard to take the results of the poll as being a measure of desired allocation. BTW, I'm 45% taxable, 32% traditional IRA, 23% Roth, so answered 50/25/25.

Topic Author
Choy
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Re: Poll: Your Portfolio Tax Diversification

Post by Choy » Thu Dec 11, 2014 1:29 am

Bill M wrote:The trouble is this isn't under our control, like asset allocation is. I'd love to move all my taxable accounts to Roth, but rules get in the way. Likewise there is a high cost to move traditional IRA to Roth. So its hard to take the results of the poll as being a measure of desired allocation.
Indeed. This poll was never meant to gauge desired tax diversification, but merely to get the lay of the land.

Initially I was curious about tax diversification by age, income and networth and would ideally have had greater options to choose from in the poll.

I actually thought that there would be a higher percentage of people with large taxable holdings. Not surprised to see that most people have a higher allocation in traditional holdings.

I'm personally about 50/25/25 Traditional/Roth/Taxable.

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Christine_NM
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Re: Poll: Your Portfolio Tax Diversification

Post by Christine_NM » Thu Dec 11, 2014 1:38 am

65% taxable
30% trad IRA
05% Roth IRA

voted not close
16% cash 48% stock 36% bond. Retired, w/d rate 2.85%

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tuningfork
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Re: Poll: Your Portfolio Tax Diversification

Post by tuningfork » Thu Dec 11, 2014 11:23 am

I voted 50/50 Traditional/Taxable but my actuals are:

56% Traditional
40% Taxable
4% Roth

I didn't qualify for Roth contributions due to income restrictions, so the Roth component is the result of some conversions now that I am retired. I also include a small HSA in my Roth accounting

Enkidu
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Re: Poll: Your Portfolio Tax Diversification

Post by Enkidu » Thu Dec 11, 2014 12:17 pm

60 Tax deferred
25 Roth
15 Taxable

I voted 50, 25, 25

I am retired and expect the results to change substantially over the next 8 years as I make Roth conversions and use up the taxable accounts.

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paco sabio
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Re: Poll: Your Portfolio Tax Diversification

Post by paco sabio » Fri Dec 12, 2014 7:37 am

taxable 15%
traditional IRA 55%
Roth IRA 30%

We have spent the last few years converting to Roths ages 65 to 70 and have arrived at the RMD state this year.
It has had a smoothing effect on our income tax and is projected to do so in the future. it's a good mix for us.

Paco Sabio

Grasshopper
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Re: Poll: Your Portfolio Tax Diversification

Post by Grasshopper » Fri Dec 12, 2014 7:58 am

50% taxable
45% tira
5% roth

Retired now 9 years converting tira to roth for 10 more years.

KlangFool
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Re: Poll: Your Portfolio Tax Diversification

Post by KlangFool » Fri Dec 12, 2014 9:10 am

50% Taxable
25% Rollover IRA
15% 401K
10% Roth IRA

I am adding 13K to Roth IRA and 23K to 401K every year. I spent all my HSA contribution. The rest is into taxable. So, I believe that it will be 50 (taxable) / 50 (tax advantage) going forward too.

KlangFool

stan1
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Re: Poll: Your Portfolio Tax Diversification

Post by stan1 » Fri Dec 12, 2014 9:27 am

About 45% taxable, 45% traditional 401K, 10% Roth IRA.

It is what it is. Contribution options open to me are maxed out and with a 37.3% marginal tax rate there's no reason for me to contribute to a Roth 401K.

feh
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Re: Poll: Your Portfolio Tax Diversification

Post by feh » Fri Dec 12, 2014 1:49 pm

50% taxable
40% tIRA/401K
10% Roth

minesweep
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Re: Poll: Your Portfolio Tax Diversification

Post by minesweep » Fri Dec 12, 2014 2:24 pm

Age 70 (in 3 months). Retired January, 2001.

Taxable - 70.3
Traditional IRA - 27%
Roth IRA - 2.7%

Mike

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avenger
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Re: Poll: Your Portfolio Tax Diversification

Post by avenger » Tue Dec 16, 2014 6:47 am

10/30/60 Roth/457/taxable
cheers ... -Mark | "Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau | [3 fund portfolio: VTI, VXUS, SV fund (yield 3.01%)]

scrabbler1
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Re: Poll: Your Portfolio Tax Diversification

Post by scrabbler1 » Tue Dec 16, 2014 7:56 am

Being an early retiree, I am very close to halfway between 75/25 taxable/tax-deferred and 50/50 taxable/tax-deferred, but I chose 75/25 because I am slightly closer to that (65/35).

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