For those with $500k-$1m in investments...

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
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celia
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Re: For those with $500k-$1m in investments...

Post by celia »

Admiral wrote:I do sometimes wonder why I bother keeping this much in a taxable account, period (though it does not generate high levels of tax) since I have no specific future use for it in mind... except perhaps as a big EF, or to use to fund an early retirement so I don't have to draw from Roth.
To give you a frame of reference, most people are not Bogleheads.
Most people do not save enough.
Most people do not plan early enough for retirement.
Most people do not max out their retirement plan options.

We are not like "most people", I can assure you.

The nice thing about having a pile of taxable is that you can be always "ready" for that once in a lifetime opportunity, whether it is "investing" in a start-up, buying a rental at below market price because the owner has to move fast, or lending it to your kid who just got into med school.
PFInterest
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Re: For those with $500k-$1m in investments...

Post by PFInterest »

About 20%
Mako
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Re: For those with $500k-$1m in investments...

Post by Mako »

Approx $600k total, around 5% taxable. I rarely add to taxable, maxing retirement accounts is enough at the moment.
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Elsebet
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Re: For those with $500k-$1m in investments...

Post by Elsebet »

5% taxable/cash
95% tax-advantaged retirement accounts
"...the man who adapts himself to his slender means and makes himself wealthy on a little sum, is the truly rich man..." ~Seneca
imareal1
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Re: For those with $500k-$1m in investments...

Post by imareal1 »

onmyway33 wrote:In my pre-boglehead days I thought that I didn't want to lock up too much money into a "old age retirement fund" and thought that there was tremendous value in the flexibility of taxable investments :oops: :oops: .
This is my thought process now. What's wrong with this reasoning?
Mr.BB
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Re: For those with $500k-$1m in investments...

Post by Mr.BB »

Were 56 and have 64% in 401k / 9% in Trad IRA / 9% SEP / 16% Roths / 1% taxable
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
Viking Too
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Re: For those with $500k-$1m in investments...

Post by Viking Too »

Age: 56, retired (Canada)
Allocation:

Tax Deferred: 69%
Tax Exempt: 10%
Taxable: 21%

Have been drawing down the Taxable account for three years, will start taking RMDs from the tax deferred accounts next year and slow down the withdrawal from the taxable account. Half of future taxable account withdrawals will be to fund the annual contributions to the tax exempt account.
itstoomuch
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Re: For those with $500k-$1m in investments...

Post by itstoomuch »

it's complicated.
IRAs, Roth are mixed in brokerage accounts and annuities (deferred GLWB). A small amount is taxable but deferred or advantaged in some fashion but outside of IRA.
Not counting investment condo held as rental for retirement income.
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knowledge
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Re: For those with $500k-$1m in investments...

Post by knowledge »

27% Taxable, though a 1/3rd of those are tax-exempt.
retiredjg
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Re: For those with $500k-$1m in investments...

Post by retiredjg »

0% taxable, 80% tax deferred, 20% Roth IRA. (retired)
123
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Re: For those with $500k-$1m in investments...

Post by 123 »

We're over $1 million with 85% tax deferred and 15% taxable. Due to the deferment of taxes the tax deferred accounts just keep getting higher and higher every year, it's amazing how they grow with such little effort.
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student
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Re: For those with $500k-$1m in investments...

Post by student »

Age is 51. I have over a million.

28% in taxable.
Last edited by student on Thu May 18, 2017 6:26 pm, edited 1 time in total.
mass_biker
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Re: For those with $500k-$1m in investments...

Post by mass_biker »

60% tax deferred/40% taxable.
I include the 529s in tax deferred.
And within taxable, there is a healthy slug of tax exempt munis.
Bacchus01
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Re: For those with $500k-$1m in investments...

Post by Bacchus01 »

~$2M

Tax Preferred: 58%
Taxable: 42%

The tax preferred includes 401k, deferred comp, 529s, Roth, and HSA. Of that, it breaks down like:

401K: 76.0%
Deferred Comp: .2%
HSA: 2.6%
529s: 10.6%
Roth: 10.6%
AdrianC
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Re: For those with $500k-$1m in investments...

Post by AdrianC »

Age 50

54% taxable
46% tax-deferred

I'm happy with that mix. Lots of options.
NiceUnparticularMan
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Re: For those with $500k-$1m in investments...

Post by NiceUnparticularMan »

I'm out of range, and thank goodness. Between 529s, stock options, and unvested restricted stock, this is actually a complex question.
retire57
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Re: For those with $500k-$1m in investments...

Post by retire57 »

Age 59, semi-retired. 52% taxable due to inheritance.
forevernaive
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Re: For those with $500k-$1m in investments...

Post by forevernaive »

30/70 taxable/tax-advantaged in actual liquid assets.

We also have significant RSUs that will likely someday be in taxable, plus non-liquid real estate investment assets (e.g. not the primary home) that are nicely tax sheltered but still ultimately taxable.

If those were included, the ratio would flip to 70/30--but we'd be outside your range.
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SmileyFace
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Re: For those with $500k-$1m in investments...

Post by SmileyFace »

NiceUnparticularMan wrote:I'm out of range, and thank goodness. Between 529s, stock options, and unvested restricted stock, this is actually a complex question.
OP said "retirement" accounts so I assume isn't asking that 529's be included.

I agree, it is a very complex question and I'm not sure the answer (even if we had an average and medium across thousands of folks) really tells much - what does the OP hope to infer from this? If you work for a megacorp with 401K with matching funds along with an HSA account - and you are below the IRA phase-out - you can stash away far more per year than someone without access to a 401K/HSA-account - and this is regardless of income. (If lower income at a megacorp you might be 0% Taxable).

I'm about 15% Taxable versus Tax-Advantaged-Retirement-Accounts (EXCLUDING 529 accounts).
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Doom&Gloom
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Re: For those with $500k-$1m in investments...

Post by Doom&Gloom »

100% tax-deferred.

But with RMD's on the horizon, that percentage should start to decrease.
minesweep
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Re: For those with $500k-$1m in investments...

Post by minesweep »

74% Taxable
26% Tax Advantaged (89% TIRA - 11% RIRA)

TIRA portion is 100% bonds. RIRA is 100% in small cap value. Mixture of stocks and tax-exempt bonds in taxable.

I took an early retirement package back in January of 2001. The company I worked for didn’t allow its employees to invest the IRA in stocks until 1991 (IRA began sometime in in later years of the 1980’s). I always contributed the most allowed in my 401K (which was much less than today’s dollars) during the 90’s and was 100% invested in stocks throughout that decade.
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Meg77
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Re: For those with $500k-$1m in investments...

Post by Meg77 »

David Jay wrote:0.9% taxable, 99.1% tax advantaged overall, just retirement portfolio ($682K) 0%/100%
Exact same situation with just slightly less in retirement currently. We do have some "taxable" aka "non-tax advantaged" investments in the form of rental real estate and a few partnerships, but no brokerage assets to speak of. I do plan to start adding around 6 figures a year to brokerage (or other real estate partnerships) each year going forward with bonus income if/when it's received.
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xyz12
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Re: For those with $500k-$1m in investments...

Post by xyz12 »

Ages: 36 and 31, Portfolio: 1.0M investments, and roughly ~53% in taxable. We have been fortunate enough to save above and beyond the tax deferred space we have available.
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Flobes
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Re: For those with $500k-$1m in investments...

Post by Flobes »

TAXABLE
1% Cash
30% Investments
15% CDs

TAX-FREE
2% HSA
20% Roth

TAX-DEFERRED
16% tIRA
10% Bene IRA
6% I-Bonds

Retired 9 years, 66. Doing Roth conversions. Delaying SS 'til 70.
Living from taxable, higher balance today than day work stopped.
A few RBDs could get me below two commas; I'll be harvesting losses, rebalancing and buying. :happy
giesen5
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Re: For those with $500k-$1m in investments...

Post by giesen5 »

Ages 45 and 46. 1% in taxable, still working on maxing out 401k, 403b, etc.
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EyeYield
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Re: For those with $500k-$1m in investments...

Post by EyeYield »

90% taxable. When I opened my IRA the limit was $1500, then increased to $2000 while I still contributed. I think I contributed $3000 once, when that was the limit.
These were among my best earning years, so I always contributed more to taxable.

Also, I started investing 10 years before there was such a thing as an IRA and it took me a while to realize the advantages of contributing to one.
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Bacchus01
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Re: For those with $500k-$1m in investments...

Post by Bacchus01 »

DaftInvestor wrote:
NiceUnparticularMan wrote:I'm out of range, and thank goodness. Between 529s, stock options, and unvested restricted stock, this is actually a complex question.
OP said "retirement" accounts so I assume isn't asking that 529's be included.

I agree, it is a very complex question and I'm not sure the answer (even if we had an average and medium across thousands of folks) really tells much - what does the OP hope to infer from this? If you work for a megacorp with 401K with matching funds along with an HSA account - and you are below the IRA phase-out - you can stash away far more per year than someone without access to a 401K/HSA-account - and this is regardless of income. (If lower income at a megacorp you might be 0% Taxable).

I'm about 15% Taxable versus Tax-Advantaged-Retirement-Accounts (EXCLUDING 529 accounts).
Since I expect my kids to be on college when I'm retired, I consider 529s part of my retirement accounts.
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badbreath
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Re: For those with $500k-$1m in investments...

Post by badbreath »

About 50% in taxable and 50% in deferred.
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2tall4economy
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Re: For those with $500k-$1m in investments...

Post by 2tall4economy »

age 40
$2M investible
50% tax advantaged
50% rental property :)
~0% taxable (it goes to my NQDC plan which is semi-tax advantaged or equity in the rental properties, both of which are effectively unlimited contribution for at least the next 5 years)
Last edited by 2tall4economy on Thu May 18, 2017 5:31 pm, edited 2 times in total.
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NiceUnparticularMan
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Re: For those with $500k-$1m in investments...

Post by NiceUnparticularMan »

DaftInvestor wrote:
NiceUnparticularMan wrote:I'm out of range, and thank goodness. Between 529s, stock options, and unvested restricted stock, this is actually a complex question.
OP said "retirement" accounts so I assume isn't asking that 529's be included.
Just an aside, but for me, at least, that is not a hard distinction, since we may be retired when using the 529s, and we may end up with excess in them which we spend on ourselves (with or without penalties) or grandkids (knock on wood).

But yes, you are probably right the OP wanted them excluded.
enebyberg
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Re: For those with $500k-$1m in investments...

Post by enebyberg »

62

400 taxable
420 tax-deferred
150 Roth
monsterid
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Re: For those with $500k-$1m in investments...

Post by monsterid »

Age: 30
70% Taxable / 30% Retirement
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sometimesinvestor
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Re: For those with $500k-$1m in investments...

Post by sometimesinvestor »

I think its an age thing. I started investing in taxable as IRAs and Roth IRAS were not available.For about 5 years I invested in both.After 1986 I no longer invested in IRAs but started investing in 401k. (they were no longer deductible for me After I retired but before I was 70 I did some Roth conversions.At this point I am about 60% in taxable (invest for more than 30 years and reinvest distributions you get pretty good growth )
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blueblock
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Re: For those with $500k-$1m in investments...

Post by blueblock »

Taxable: 9%
Retirement Accounts: 91%

I'm 65 and have been retired for two years. I am no longer adding to taxable.
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aj76er
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Re: For those with $500k-$1m in investments...

Post by aj76er »

Roughly 50/50

I max out 401k/HSA and then try to match that on the taxable side.

Im also building an EE/I bond ladder for years 60-70 that I consider outside of my portfolio (so not counted in ratio above).
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KSOC
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Re: For those with $500k-$1m in investments...

Post by KSOC »

Age 58.
11% taxable.
Losing job end of June.
Have cut back 401k to just get company match, and build up taxable savings.
Aware of age 55 rule, turn 59 1/2 August 2018.
Not ready to invade my tax deferred funds, but if I did it would make me delay SS.
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Artisan
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Re: For those with $500k-$1m in investments...

Post by Artisan »

We have about 40% taxable/60% tax deferred. We recently payed off our mortgage so it was probably closer to 50/50..
runner540
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Re: For those with $500k-$1m in investments...

Post by runner540 »

imareal1 wrote:
onmyway33 wrote:In my pre-boglehead days I thought that I didn't want to lock up too much money into a "old age retirement fund" and thought that there was tremendous value in the flexibility of taxable investments :oops: :oops: .
This is my thought process now. What's wrong with this reasoning?
You're probably discounting the value of a tax shield, and there are mechanisms to access tax-advantaged retirement funds before age 59.5. Any year you can save as much as you want in taxable, but tax advantaged space is use it or lose it every year.
VARN2020
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Re: For those with $500k-$1m in investments...

Post by VARN2020 »

58 years old, married

260k tax advantaged in TSP and 403b
822k taxable (300k from windfall)
115k CDs
22k I bonds
28k Israeli bonds
5k HSA

House paid for worth at least 750k
170k 529 plans for kids
Several m in special needs trust for one son
I don't count any of this as it's not mine and not liquid

Would have more in tax advantaged but cashed out 300k years ago to pay for medical bills,etc and took a long time to start saving again. Now max out TSP in Roth and will fully fund husband sep ira this year. Many mistakes along the way but glad to have saved well and lived frugally.
523HRR
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Re: For those with $500k-$1m in investments...

Post by 523HRR »

Age: 54 (Retired since 2012). Married.

42% Taxable
49% Tax-Deferred (401k, IRAs, Deferred Compensation, Voluntary Pension)
9% Tax-Free (Roth 401k, Roth IRAs, Education IRA, 529, HSA)
Daryl
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Re: For those with $500k-$1m in investments...

Post by Daryl »

1.8% - Taxable
31.6% - Tax Deferred (401K / Trad IRA)
66.5% - Tax Free (Roth / HSA)

I front-load my IRA / 401K contributions annually so my Taxable account tends to shrink until I hit the maximum contribution amounts for the various accounts and then I'll build up the Taxable account balance through the second half of the year.
Tom1320
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Re: For those with $500k-$1m in investments...

Post by Tom1320 »

We are slightly outside that range and are around 3% taxable and 97% tax advantaged.
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Cunobelinus
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Re: For those with $500k-$1m in investments...

Post by Cunobelinus »

tyrion wrote:Excluding the emergency fund, it's 7% taxable and 93% tax deferred. Mid 40s. We max out retirement accounts and add 200-300/month to a tax efficient stock fund in a taxable account.

I think people with a large % in taxable will be in one of several camps:
1 Received inheritance/windfall (stock options, business sale, etc)
2 Limited tax deferred investment options (no 401k, etc)
3 Highly compensated younger folks who will soon leave your 500k - 1 Mil range.
I'm not sure what "large %" actually means in this context.
I'm in my thirties and I have somewhere between 30-50% in taxable. Absolutely, closer to 50%; but per my mental accounting, closer to 30%. The discrepancy exists because I started investing in DRIPs at the beginning of my working career before I heard about 401ks(TSP) or index funds. I've mentally written off the DRIPs now and I'm slowly using them to make charitable donations now instead of cash or monthly donations.. so they exist; however, I don't look at them but once or twice a year and they don't show up my account summary online at my bank. I may figure out the cost basis eventually and work to sell them strategically. The DRIPs were initially a set-and-forget strategy for life and I didn't consider keeping good records because I didn't anticipate ever selling. The 30% is what I have in index funds at Vanguard and my first stock purchase ever (AAPL around $70).

I don't fall into either of your three camps above, but I think either 30% or 50% is a large percentage. I saved/invested most of my income when I started and only bought fancy things occasionally when there was a big payoff from individual stocks (buying AMZN around $30 and selling around $120; though I just looked at the price now :oops: ).

Early on, I decided I would save/invest a specific amount of my paycheck and figure out how to live on the rest, making automatic deductions occur on the day I'd get payed. Once I heard about 401ks (TSP), I immediately started maxing that out, and while I was single and unencumbered I continued to put away a lot into taxable automatically. Deployments and a lot of time away from home help with limiting expenses though. I was lucky to have learned about the TSP and index funds, and then spent most of my time at work and/or away from home for 2007-2010: most of my income went into a low/recovering stock market.

I've always wondered at how most people here have large tax-advantaged accounts and relatively small (<10%) taxable accounts. I've only ever been eligible for a 401k(TSP) and an IRA though, so perhaps that explains it (no HSA, SEP, 403-b, Formula 409, et cetera).
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Thrifty Femme
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Re: For those with $500k-$1m in investments...

Post by Thrifty Femme »

Average Age: 41.5
39.62% Tax free (Roth IRAs, Roth 401k, HSAs)
60.38% Taxed
- Taxable investments (brokerage accounts) 5.01%
- Tax deferred (401ks and traditional IRAs) 55.37%

Cash and 529s are not included. We will continue maxing 401ks, HSAs, and Roth IRAs and throwing extra money at the brokerage accounts for the foreseeable future. When we're both retired, I hope be in celia's position!
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Thrifty Femme
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Re: For those with $500k-$1m in investments...

Post by Thrifty Femme »

Cunobelinus wrote: I've always wondered at how most people here have large tax-advantaged accounts and relatively small (<10%) taxable accounts. I've only ever been eligible for a 401k(TSP) and an IRA though, so perhaps that explains it (no HSA, SEP, 403-b, Formula 409, et cetera).
Little money left after paying bills and maxing 401ks, HSA, and IRAs.
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whodidntante
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Re: For those with $500k-$1m in investments...

Post by whodidntante »

I have just over a third in a taxable account with equity index ETFs.
John Z
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Re: For those with $500k-$1m in investments...

Post by John Z »

9% Taxable
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FreeAtLast
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Re: For those with $500k-$1m in investments...

Post by FreeAtLast »

OP-

75% taxable, 25% tax deferred. For most of my investing life, all I had access to as far as tax deferred/tax free was the traditional IRA.

Free
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travellight
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Re: For those with $500k-$1m in investments...

Post by travellight »

15% taxable. I thought I was an extreme outlier since I had no taxable till this year at age 55.
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GoldenFinch
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Re: For those with $500k-$1m in investments...

Post by GoldenFinch »

Ages 50 and 50

50% taxable
50% retirement
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