POLL: What Percentage of Your Retirement Portfolio is Roth?

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POLL: What Percentage of Your Retirement Investment Portfolio is Roth 401(k) or Roth IRA?

Zero
38
14%
> 0 to 10%
86
31%
> 10% to 20%
58
21%
> 20% to 30%
42
15%
> 30% to 40%
17
6%
> 40% to 50%
4
1%
> 50% to 60%
10
4%
> 60% to 70%
7
3%
> 70% to 80%
1
0%
> 80% to 90%
4
1%
> 90% to 100%
8
3%
 
Total votes: 275

Topic Author
MichDad
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POLL: What Percentage of Your Retirement Portfolio is Roth?

Post by MichDad » Thu Jan 23, 2014 6:05 pm

I would like to gauge the level of commitment Bogleheads have made to investing in either Roth 401(k)s or in Roth IRAs. If you and your spouse/partner view your portfolios as one, please respond using combined figures/percentages. Just over 25 percent of my and my wife's combined retirement investment portfolio is currently invested in Roth accounts. That percentage is increasing over time because most of our new investments are being made into Roth accounts.

Thank you for participating.

MichDad

Edited to modify the subject to indicate that this is a poll.
Last edited by MichDad on Thu Jan 23, 2014 6:15 pm, edited 1 time in total.

livesoft
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Re: What Percentage of Your Retirement Portfolio is Roth?

Post by livesoft » Thu Jan 23, 2014 6:06 pm

Roth IRAs were not available for folks with moderate incomes until relatively recently, so I don't think one can judge the level of commitment from any percentages from a poll.

Our Roths are under 5% of our portfolio. I am glad Roth 401(k)s are not available to us because we might have been fooled into using them and paying way more taxes than we needed to.
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Alan S.
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by Alan S. » Thu Jan 23, 2014 6:55 pm

I based my % of 15% on taxable retirement funds as well as IRAs. Counting just tax deferred accounts the % would be 21%.

Silence Dogood
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Re: What Percentage of Your Retirement Portfolio is Roth?

Post by Silence Dogood » Thu Jan 23, 2014 7:16 pm

livesoft wrote:Roth IRAs were not available for folks with moderate incomes until relatively recently, so I don't think one can judge the level of commitment from any percentages from a poll.

Our Roths are under 5% of our portfolio. I am glad Roth 401(k)s are not available to us because we might have been fooled into using them and paying way more taxes than we needed to.
I wish my employer offered a Roth 401(k) - considering that I do not earn enough to pay federal income taxes.

gkaplan
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by gkaplan » Thu Jan 23, 2014 7:23 pm

As of 12/31/2013:

69.79%: Vanguard Roth IRA
30.21%: TSP (Traditional)
Gordon

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by DVMResident » Thu Jan 23, 2014 7:39 pm

Just finished residency program. Marginal rate is 15% bracket + 6% state.
Almost all retirements accounts are ROTH (87.1%), but I switched to traditional this year and the ROTH will be dwarfed in a few years.
I think young people who expect larger incomes later (e.g. MDs) will skew your poll high. These high ROTH percent account are probably small in nominal dollars. Looks like you already have a bi-modal distribution.

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by letsgobobby » Thu Jan 23, 2014 7:56 pm

MichDad wrote:I would like to gauge the level of commitment Bogleheads have made to investing in either Roth 401(k)s or in Roth IRAs. If you and your spouse/partner view your portfolios as one, please respond using combined figures/percentages. Just over 25 percent of my and my wife's combined retirement investment portfolio is currently invested in Roth accounts. That percentage is increasing over time because most of our new investments are being made into Roth accounts.

Thank you for participating.

MichDad

Edited to modify the subject to indicate that this is a poll.
What do you mean by the term 'commitment'?

40% traditional
40% taxable
20% Roth

but not sure what that says about my commitment?

sunnyday
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by sunnyday » Thu Jan 23, 2014 8:06 pm

I'm not sure how much one can deduce from this poll since taxable money could skew the numbers greatly for certain portfolios. Maybe asking what percent of one's annual contributions go towards Roth vs pre-tax would have been more telling?

The only reason I contribute to any post-tax (roth) money is because I can't contribute to a traditional IRA. So I'm not 'committed' to my Roth at all

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by JW-Retired » Thu Jan 23, 2014 8:21 pm

It's only 3%, which is a big regret.
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Texas hold em71
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by Texas hold em71 » Thu Jan 23, 2014 8:28 pm

My percentage in Roth is low because I can only access it via back door contributions. If I could, I would have all or a very large percentage of my taxable investments in a Roth.

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Peter Foley
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by Peter Foley » Thu Jan 23, 2014 8:31 pm

While I am happy to answer to poll, the premise is not a reasonable one.

Michdad wrote:
I would like to gauge the level of commitment Bogleheads have made to investing in either Roth 401(k)s or in Roth IRAs.
We have about 10% in our Roths, but this does not reflect our "commitment" to them. I'm 63 and retired. Roths came into being long after my wife and I had made signficant "commitments" to tax deferred savings. Then after only a few years we made too much to invest in Roths. It was only a few years ago that tax law changes were made to allow for back door Roths.

Also, when you consider the Roth maximum contribution compared to the 401k or 403b contribution, that again skews the numbers in favor of deferred accounts. If the rules were reversed, allowing $17,000 or more to be invested in a Roth with no income cap, we would have a much different "commitment".

Edit: We are close to 10% only because of two years of Roth conversions.
Last edited by Peter Foley on Thu Jan 23, 2014 8:33 pm, edited 1 time in total.

bhsince87
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by bhsince87 » Thu Jan 23, 2014 8:32 pm

Zero for me. Too much income, have no Roth 401k option at work, and have a large rollover IRA that I can’t move to a 401k.

I’m using a taxable account instead, investing in zero to low dividend paying stocks, hoping that the current 0% div and cap gain brackets will still exist when I retire.

Not quite as good as a Roth, but close.
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

letsgobobby
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by letsgobobby » Thu Jan 23, 2014 8:54 pm

Texas hold em71 wrote:My percentage in Roth is low because I can only access it via back door contributions. If I could, I would have all or a very large percentage of my taxable investments in a Roth.
I also would like to have a very large Roth. Ideally, my entire portfolio would be in a Roth. Is it possible to have one of those without paying annoying taxes first?

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Re: What Percentage of Your Retirement Portfolio is Roth?

Post by joe8d » Thu Jan 23, 2014 9:26 pm

livesoft wrote:Roth IRAs were not available for folks with moderate incomes until relatively recently, so I don't think one can judge the level of commitment from any percentages from a poll.

Our Roths are under 5% of our portfolio. I am glad Roth 401(k)s are not available to us because we might have been fooled into using them and paying way more taxes than we needed to.
+1
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Flobes
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by Flobes » Thu Jan 23, 2014 10:29 pm

I'm retired, so it's all a retirement portfolio now.

Tax Favored:
17% Roth
11% IRA
11% Beneficiary IRA
5% IBonds
2% HSA

55% Taxable

(\Rounding error: adds to 101%)

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Ice-9
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by Ice-9 » Thu Jan 23, 2014 10:49 pm

My Roth balance is 13% of the total retirement portfolio.

If I make a quick and dirty attempt at accounting for before tax money vs after tax money, it's more like 16%. Still same poll category.

cravej
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by cravej » Thu Jan 23, 2014 10:50 pm

I keep wondering if I am too heavily vested in Roth's. I've been maxing my Roth IRA for 10 years, and I switched my 401k over to a roth a few years ago, as soon as my employer offered it. I'm 34 years old, wife is 30 and we are currently in the 25% tax bracket. I obviously have no idea where the tax brackets will be in 30 years, but even to plan on staying at my current spending level, it seems like favoring the Roth is the right move.

My portfolio is currently:
  • 59% - Roth
  • 38% - Traditional pretax
  • 3% - Taxable

island
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by island » Thu Jan 23, 2014 11:25 pm

Texas hold em71 wrote:My percentage in Roth is low because I can only access it via back door contributions. If I could, I would have all or a very large percentage of my taxable investments in a Roth.
Same here. Husband and I only discovered back door Roths in 2013 so only have 26K, a drop in the bucket.

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cheese_breath
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by cheese_breath » Thu Jan 23, 2014 11:57 pm

38.73% as of January 1. I had been converting various amounts from the year Roths were first available until last year. I think I've got enough converted now so RMDs won't affect my tax bracket so I don't plan on doing any more. But then who knows for sure? Best laid plans of mice and men...
The surest way to know the future is when it becomes the past.

DEBTINATOR
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by DEBTINATOR » Fri Jan 24, 2014 12:09 am

cravej wrote:I keep wondering if I am too heavily vested in Roth's. I've been maxing my Roth IRA for 10 years, and I switched my 401k over to a roth a few years ago, as soon as my employer offered it. I'm 34 years old, wife is 30 and we are currently in the 25% tax bracket. I obviously have no idea where the tax brackets will be in 30 years, but even to plan on staying at my current spending level, it seems like favoring the Roth is the right move.

My portfolio is currently:
  • 59% - Roth
  • 38% - Traditional pretax
  • 3% - Taxable
You might be. Take a look at some Roth 401k vs trad 401k threads. A lot feel the traditional has the lead depending on circumstances. If you retire early you have years of low income to convert it at less than 25%

Sriracha
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by Sriracha » Fri Jan 24, 2014 1:08 am

No Roths for us, for better or worse. Our only option is backdoor, and it just doesn't make any sense right now.
Don't reach for yield.

Carl53
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by Carl53 » Fri Jan 24, 2014 4:24 am

14% Roths and increasing about 1% per year by conversions to the top of the 15% bracket.

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by nisiprius » Fri Jan 24, 2014 7:48 am

Don't see how the number can be a gauge of "commitment." We have come reasonably close to maxing out our Roths every year since they became available. We've contributed about 85-90% of the maximum we were allowed to contribute, and used the "catch-up" extra for older investors as soon as it was instituted. And we prioritized our Roth over our 401(k). So I'd call that a strong commitment. But, hey, I've had a 403(b) and 401(k) available to me for nearly thirty years, Roth for only about half that, and at the beginning you could only put $2,000-$3,000 in a Roth and more than five times that amount in the 401(k).

So, I can't imagine a much stronger commitment to funding the Roth than we've had, yet it is only about 1/6 of our retirement portfolio
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House Blend
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by House Blend » Fri Jan 24, 2014 9:24 am

About 2% Roth. The rest is about equally split between taxable and tax-deferred.

Roths did not exist until 1998, and I was slow to catch on. Definitely missed a few chances to make contributions (my bad), but by the time they were on my radar I was not eligible to contribute. The backdoor Roth technique, and Roth conversions for higher income folk, did not exist until 2009(?) or so.

My employer started offering Roth options last year, but tax deferral is a much better deal for me.

Ask me again after I've had a few years of Roth conversions during early retirement.

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by donall » Fri Jan 24, 2014 9:36 am

Peter Foley wrote:While I am happy to answer to poll, the premise is not a reasonable one.

Michdad wrote:
I would like to gauge the level of commitment Bogleheads have made to investing in either Roth 401(k)s or in Roth IRAs.
We have about 10% in our Roths, but this does not reflect our "commitment" to them. I'm 63 and retired. Roths came into being long after my wife and I had made signficant "commitments" to tax deferred savings. Then after only a few years we made too much to invest in Roths. It was only a few years ago that tax law changes were made to allow for back door Roths.

Also, when you consider the Roth maximum contribution compared to the 401k or 403b contribution, that again skews the numbers in favor of deferred accounts. If the rules were reversed, allowing $17,000 or more to be invested in a Roth with no income cap, we would have a much different "commitment".

Edit: We are close to 10% only because of two years of Roth conversions.
It would be interesting to see % Roth disaggregated according to age.

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by kaudrey » Fri Jan 24, 2014 9:55 am

bhsince87 wrote:Zero for me. Too much income, have no Roth 401k option at work, and have a large rollover IRA that I can’t move to a 401k.

I’m using a taxable account instead, investing in zero to low dividend paying stocks, hoping that the current 0% div and cap gain brackets will still exist when I retire.

Not quite as good as a Roth, but close.
+1

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Re: What Percentage of Your Retirement Portfolio is Roth?

Post by Dulocracy » Fri Jan 24, 2014 9:59 am

livesoft wrote:Roth IRAs were not available for folks with moderate incomes until relatively recently, so I don't think one can judge the level of commitment from any percentages from a poll.

Our Roths are under 5% of our portfolio. I am glad Roth 401(k)s are not available to us because we might have been fooled into using them and paying way more taxes than we needed to.
Livesoft - are you saying this because a ROTH 401k has some difference from the IRA that we should know about, or simply because the ROTH would not have been appropriate in your situation?
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by Dandy » Fri Jan 24, 2014 10:11 am

Many of us older members didn't have access to Roth during much or all of our accumulation years. This was either due to income restrictions or the product didn't exist. e.g. my company put in a Roth 401k in 2007 a year before I retired.

Now if it had been available I probably would have allocated 50% Roth and 50% TIRA. I needed some yearly tax relief during the later working years.

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by letsgobobby » Fri Jan 24, 2014 11:23 am

House Blend wrote:The backdoor Roth technique, and Roth conversions for higher income folk, did not exist until 2009(?) or so.
The income restriction for Roth conversions was eliminated in 2010.

However, the law that made that possible was passed in 2005 or 2006 (I can't remember if in time for the 2005 tax year), so someone really paying attention could have started making non-deductible TIRA contributions in 2005 or 2006 in anticipation of a future conversion opportunity.

Even better, one could have been making non-deductible contributions for many years prior to 2006, with no specific end-game strategy, and then been 'bailed out' so to speak when the law was passed. What a nice gift.

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by dsmil » Fri Jan 24, 2014 11:33 am

I'm at around 50%, although everything that I've invested other than my 401k is in a Roth. Assuming that we aren't phased out anytime soon, I don't see this changing. I'm in my mid-20's and by the time that I retire, I could easily see tax rates significantly higher than they are now considering the mess of debts that we'll have hanging over us. Even if I'm making less money at retirement and in a lower "bracket" at that point, I'd rather lock-in the tax rate that I'm paying now rather than making a bet on the future.

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by englishgirl » Fri Jan 24, 2014 11:40 am

I guess I'm not very committed to Roth space. I do now max out my Roth IRA, and that is my #1 priority for investing money. I also regret that I had a couple of years there where I didn't max my Roth IRA, and hope that won't happen again. However, while I initially flirted with the Roth 401k when my employer first allowed them, I figured the tax break was more useful now and that I'm likely to be in a lower tax bracket in retirement. So, I switched back to 100% of my 401k contributions going the traditional route.
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cheese_breath
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by cheese_breath » Fri Jan 24, 2014 11:51 am

dsmil wrote:... I'm in my mid-20's and by the time that I retire, I could easily see tax rates significantly higher than they are now ....
I thought the same thing when I was in my mid-20s in the 1960s. Somehow it didn't work out that way though. Lowest tax rate in 1965 was 14% on the first thousand dollars. Highest tax rate was 70% on anything over $200,000. How does that compare with today's rates?

You might very well be right, but nobody knows for sure.
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by Goldfinger » Fri Jan 24, 2014 12:08 pm

We're right at 19%. As a percentage of annual contributions, it's a bit higher at 25%. We had about 8 or 9 years of work under our belts when the Roth was introduced, and fortunately took advantage of the 4 year allowance to pay the taxes since we converted our trad IRAs in the year 1998, I believe.

I'd like our Roth balances to reach around 30-40% by retirement time, but this will no doubt require additional conversions - perhaps right around retirement.

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MichDad
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by MichDad » Fri Jan 24, 2014 12:37 pm

I'm the original poster. Some have questioned my use of the word "commitment" in the commentary that accompanied my poll. By "commitment," I meant simply the percentage of Bogleheads' retirement portfolio devoted to Roth 401(k)s or Roth IRAs. At age 58, I too am among the group of people who would likely have a higher percentage of Roth investments today if the laws were as flexible ten and twenty years ago as they are today. If fortune shines upon me, I hope the Roth component of my retirement portfolio will be about one-third by the time I retire in four years. Then, I'll likely try to make further Roth conversions in the years before I start to collect Social Security.

I also agree with the comment of at least one poster that this poll would be more meaningful if we could measure retirement portfolio Roth percentages along with the present ages of respondents. However, this is the first poll I've done on this forum and I couldn't see how to construct a poll that could gather data on two separate criteria at the same time. Also, a complicating factor would be for those respondents who are married or who have partners with different ages. If someone can figure out a better way to construct this poll, I'm all for it.

Thank you all for your participation and your helpful commentary. I am finding the results very interesting.

Best regards,

MichDad

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Our tax bracket has always been the highest so

Post by Marmot » Fri Jan 24, 2014 1:25 pm

We chose to defer paying the taxes. We are both ER'ing in a few months. We are planning on 7 years (in which we will Roth $ over) of little or no planned income before I begin to collect a pension at 62. We will certainly be less that the 39% we are paying now.
Last edited by Marmot on Fri Jan 24, 2014 1:46 pm, edited 1 time in total.

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by kenyan » Fri Jan 24, 2014 1:37 pm

Currently a bit over 20%, but that will probably decline in the near term. We stopped maxing our Roth IRAs in order to fund my wife's SIMPLE to the max. Hopefully, our income will increase faster than our costs over the next few years, and the Roths will again be funded to the maximum. I would be very pleased with the state of our retirement savings rate if we could max all of our tax-advantaged options, and would direct additional savings to our college funds and mortgage.
Retirement investing is a marathon.

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by obgyn65 » Fri Jan 24, 2014 7:33 pm

Close to zero in my case.
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by TimeRunner » Fri Jan 24, 2014 10:50 pm

deleted
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by GerryL » Sat Jan 25, 2014 2:18 am

I'm under 10%. I opened a ROTH IRA as soon as they were created. Maxed it out every year, but now I am on the cusp of the income limit restrictions and may not get to max out for 2013. I intend to convert some of my Traditional IRA after I retire next year -- if it makes tax sense.

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by Hexdump » Sat Jan 25, 2014 7:35 am

Only 7% and I regret it but would probably not do anything different.

When the time came to make the annual contribution, the present tax advantage always overrode any future tax savings. I try and take any tax benefits that I can. Did I ever tell you that I hate paying taxes ?

Until I started doing RMDs of course. :D

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by Alexandria » Sat Jan 25, 2014 8:51 am

60%+ Age 37

Actually, in our 20s we did not utilize ROTHs because we had a higher income and the tax break meant more to me. But my spouse stopped working when we had kids, and we eventually converted everything over at lower tax rates. win-win. For the long run, I'd expect most our money to be in ROTHs because our tax rate is still low and IRAs are all that we have at our disposal. We are only 60% in ROTHs because I had a work retirement plan that I have since converted to an IRA. I'd prefer to convert that one in a lower stock market year or just wait out a period of unemployment for a lower tax rate on conversion. Of course, since we aren't adding to it and we put our slower growing investments in there, we may just leave it be. Our ROTHs will blow that IRA out of the water, eventually.

My parents are interesting because they retired around age 57 and have a no-income-tax situation for several years. Though their incomes were very high last they worked and were never eligible for ROTHs (nor would they have chosen them, due to high tax rates). So they are converting as much as they can at the 0% - 15% income tax rates. Which in turn will likely keep their income "tax-free" through the rest of retirement. I believe they had 0% in ROTHS *when* they retired.

I like the win-win strategy of doing both. Take the IRA and 401k tax deductions at 25%+ tax rate; convert to ROTHs any time you experience lower taxes.

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Boglenaut
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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by Boglenaut » Sat Jan 25, 2014 9:06 am

18.1%

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Re: POLL: What Percentage of Your Retirement Portfolio is Ro

Post by cherijoh » Sat Jan 25, 2014 9:27 am

cravej wrote:I keep wondering if I am too heavily vested in Roth's. I've been maxing my Roth IRA for 10 years, and I switched my 401k over to a roth a few years ago, as soon as my employer offered it. I'm 34 years old, wife is 30 and we are currently in the 25% tax bracket. I obviously have no idea where the tax brackets will be in 30 years, but even to plan on staying at my current spending level, it seems like favoring the Roth is the right move.

My portfolio is currently:
  • 59% - Roth
  • 38% - Traditional pretax
  • 3% - Taxable
Since you mention that you are maxing your Roth, then you are effectively sheltering more money than you could in a traditional 401-k. You are sheltering $17.5K after-tax money vs. $17.5k pre-tax in the traditional. Another plus is your long time horizon and relatively low marginal tax bracket. FWIW, if I were in your shoes I would be doing the same.

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