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
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).