Hi,
My wife and I both are employed and have our respective 401K, we max out every year. We cannot contribute directly to Roth IRA so we put money in tIRA and immediately convert it to Roth IRA. We also have Vanguard taxable brokerage account which is a joint account.
In the 2 401Ks and in the brokerage account, we are maintaining approximately 60%/40% stock/bond allocation.
Few weeks back I came across one thread stressing the importance of not having bonds in taxable account because it incurs tax at the end of each financial year.
Given my situation, is there a flaw in my asset allocation? I understand that 401K is a tax advantaged account and perhaps more bonds should go there. However, I also want to counter volatility risk of stocks with bonds in the taxable account. Second, 401K has annual limit while in taxable account, I can put as much or as less as I want. So even if I decide to purchase more bonds in 401K, the amount in 401K cannot match the amount in taxable account (comparing the two scenarios).
* By stock/bond , I mean total stock index mutual fund and total bond index mutual fund.
Any guidance is appreciated as always.
Thanks,
-ssn
My wife and I both are employed and have our respective 401K, we max out every year. We cannot contribute directly to Roth IRA so we put money in tIRA and immediately convert it to Roth IRA. We also have Vanguard taxable brokerage account which is a joint account.
In the 2 401Ks and in the brokerage account, we are maintaining approximately 60%/40% stock/bond allocation.
Few weeks back I came across one thread stressing the importance of not having bonds in taxable account because it incurs tax at the end of each financial year.
Given my situation, is there a flaw in my asset allocation? I understand that 401K is a tax advantaged account and perhaps more bonds should go there. However, I also want to counter volatility risk of stocks with bonds in the taxable account. Second, 401K has annual limit while in taxable account, I can put as much or as less as I want. So even if I decide to purchase more bonds in 401K, the amount in 401K cannot match the amount in taxable account (comparing the two scenarios).
* By stock/bond , I mean total stock index mutual fund and total bond index mutual fund.
Any guidance is appreciated as always.
Thanks,
-ssn
Statistics: Posted by ssn — Thu Feb 08, 2024 9:30 pm — Replies 1 — Views 207