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Allocation (taxable and non-taxable accounts)


I have been thinking more about allocation from an entire asset point of view.
Now that I am closer to retirement age and unemployed, I am trying to do a better job looking at allocation then I had previously done.
I recall reading that it's better to re-balance within non-taxable funds to avoid generating taxes and fees.
I am now thinking of looking at the allocation of my entire portfolio and for the purposes of calculating current allocation just ignoring if they are in taxable or non-taxable accounts. Does that make sense?
Danielle
Reply to
DanielleOM
Try to maximize the amount that you will have in your Roth. Do Roth conversions but limit the conversion size so that you aren't in a very high tax bracket. And pay the tax for the conversion with taxable holdings instead of out of your IRA or 401k.
It shouldn't matter too much as to how you do the balancing.
-- Ron
Reply to
Ron Peterson
This year I not had any income from employment. I thought that would limit roth contributions to zero. Not sure if that affects roth rollover. Right now my Roth only has TAVFX. I think I would want to set up a new one.
Danielle
Reply to
DanielleOM
Depending what taxable income (from other sources) you have, a Roth conversion may be ideal. Perhaps just enough to 'fill' the 10 or 15% bracket. So long as you have the cash available to pay the tax in 2013, and if you plan to be in a higher bracket in future years.
Reply to
JoeTaxpayer

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