Personal Investments • Practically speaking, how important is international fund placement?

Hi all,

Relatively new to the game, and have a decent understanding of tax-conscious fund placement, but have been reading articles about the benefits of keeping international funds in tax-advantaged accounts (e.g. https://www.physicianonfire.com/international-stock/). I tried running my own numbers and it does seem to make sense to redirect my new money towards international funds toward tax-advantaged accounts.

Right now, for new money, I allocate approximately like this:
Taxable
-TSM: 35% (which will go down as my taxable account overshoots my 403B, which will happen this year)
-INT: 21% (which will go up, as above)
-Other (Avantis funds, which I can't put in tax-advantaged): 44%

IRA
-TSM: 70%
-INT: 30%

HSA
-TSM: 100%

403B
-TSM: 75%
-INT: 25%

To give me an AA of 52% TSM, 25% INT, 23% other

I am instead thinking of going for the same AA with different new money distributions (not selling anything):
Taxable
-TSM: 56%
-INT: 0%
-Other (can't go in tax-advantaged): 44%

IRA
-TSM: 0%
-INT: 100%

HSA
-TSM: 100%

403B
-TSM: 50%
-INT: 50%

With small amounts going into the taxable INT fund to help for rebalancing as needed.

However, I also have seen a lot of anecdotal advice to keep a good amount of total US in tax-advantaged accounts because, at least recently, it has had the best growth, and thus theoretically the best benefit from avoiding taxes. So I am wondering, practically speaking, how much thought people here put into minimizing tax burden of relatively less tax-efficient international funds vs keeping a more even distribution.

If it matters, my marginal tax rate is 35%. Thanks.

Statistics: Posted by breakfastinbed — Wed Jul 10, 2024 1:19 am — Replies 0 — Views 106

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