Hello there,
I have a 60/40 portfolio (I'm 55, retiring in 10+ years because I really like my job) and it's ultra simple: VSMGX LifeStrategy in an inherited IRA, AOR in a regular IRA, and AOR in a brokerage account.
The inherited IRA, that's staying in VSMGX. My question today is about the IRA and the taxable brokerage account.
The IRA has roughly $350K and the brokerage account has roughly $650K, both in AOR. Identical funds. I know bonds in a taxable account aren't ideal, which brings me to my question. I absolutely love the one-fund idea, I'm prone to tinkering and having not only a mirrored asset allocation but having identical funds in the IRA and taxable saves me from doing stupid things. Protecting my accounts from myself is important to me and my wife. However, I don't know how much of a tax punishment I'm taking by having a 60/40 ETF in my brokerage account. I could easily change my investments to have $350K of BND or BNDW in the IRA, and then have $600K of VT and $50K of BND in the brokerage account and rebalance yearly to keep that 60/40 allocation. I'd rather not do this, but I also don't want to spend excessive tax dollars for the one-fund convenience.
I have no problems selling the AOR all at once, I haven't had it for very long so there's no significant gains and almost no tax hit. If I wait, that's a different story.
I'd really like to learn here. How does one go about estimating how "bad" my 60/40 AOR ETF is in my taxable account, and how much "better" it will be if I went all-bond in my IRA and went stock-heavy in the taxable? Is my simple, mirrored allocation costing me hundreds (no big deal) or thousands (a bigger deal) in taxes? Appreciate the help!
Steveo
I have a 60/40 portfolio (I'm 55, retiring in 10+ years because I really like my job) and it's ultra simple: VSMGX LifeStrategy in an inherited IRA, AOR in a regular IRA, and AOR in a brokerage account.
The inherited IRA, that's staying in VSMGX. My question today is about the IRA and the taxable brokerage account.
The IRA has roughly $350K and the brokerage account has roughly $650K, both in AOR. Identical funds. I know bonds in a taxable account aren't ideal, which brings me to my question. I absolutely love the one-fund idea, I'm prone to tinkering and having not only a mirrored asset allocation but having identical funds in the IRA and taxable saves me from doing stupid things. Protecting my accounts from myself is important to me and my wife. However, I don't know how much of a tax punishment I'm taking by having a 60/40 ETF in my brokerage account. I could easily change my investments to have $350K of BND or BNDW in the IRA, and then have $600K of VT and $50K of BND in the brokerage account and rebalance yearly to keep that 60/40 allocation. I'd rather not do this, but I also don't want to spend excessive tax dollars for the one-fund convenience.
I have no problems selling the AOR all at once, I haven't had it for very long so there's no significant gains and almost no tax hit. If I wait, that's a different story.
I'd really like to learn here. How does one go about estimating how "bad" my 60/40 AOR ETF is in my taxable account, and how much "better" it will be if I went all-bond in my IRA and went stock-heavy in the taxable? Is my simple, mirrored allocation costing me hundreds (no big deal) or thousands (a bigger deal) in taxes? Appreciate the help!
Steveo
Statistics: Posted by steveosteveo — Sun Jan 19, 2025 2:40 pm — Replies 6 — Views 405