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Asset Allocation/Rebalancing Help

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  • Avatar ottendave 
    Participant
    Status: Physician
    Posts: 11
    Joined: 03/15/2018

    Hello,

    I am hoping to ensure that I distribute my investments in the most tax-efficient way possible.

     

    Overall investment strategy:

    -55% US stocks, primarily in Vanguard Total Stock Market Index Fund (VTSAX) and/or TSP S fund

    -20% International stocks, primarily in Vanguard Total International Stock Market Index Fund (VTIAX) and/or TSP I fund

    -20% US bonds, primarily in Vanguard Total Bond Market Index Fund (VBTLX) and/or TSP G fund

    -5% in Vanguard Real Estate Index (REIT) Fund (VGSLX)

     

    I have a TSP account, i401k, personal and spousal Roths, and a taxable brokerage account

    Should I aim to have no bonds or REIT in my taxable account?

    Is there otherwise a big difference in where I should place my investments in the tax advantaged accounts, or should I just use the above overall strategy in each?

    As I rebalance in the future the bond/G fund percentage will increase but will likely keep the above overall strategy for the next 5-10 years.

     

    Thanks!

     

     

    #179415 Reply
    Avatar jhwkr542 
    Participant
    Status: Physician
    Posts: 952
    Joined: 02/15/2016

    Should I aim to have no bonds or REIT in my taxable account?

    Correct

    Is there otherwise a big difference in where I should place my investments in the tax advantaged accounts, or should I just use the above overall strategy in each?

    Roth accounts should preferentially have your most aggressive/highest growth funds, so priorize stocks in Roth accounts.

    #179611 Reply
    Avatar Peds 
    Participant
    Status: Physician
    Posts: 3050
    Joined: 01/08/2016

    Tsp can 100% be G fund.

    #179613 Reply
    DMFA DMFA 
    Moderator
    Status: Physician
    Posts: 2115
    Joined: 06/24/2016
    Splash Refinancing Bonus

    Hello,

    I am hoping to ensure that I distribute my investments in the most tax-efficient way possible.

     

    Overall investment strategy:

    -55% US stocks, primarily in Vanguard Total Stock Market Index Fund (VTSAX) and/or TSP S fund

    -20% International stocks, primarily in Vanguard Total International Stock Market Index Fund (VTIAX) and/or TSP I fund

    -20% US bonds, primarily in Vanguard Total Bond Market Index Fund (VBTLX) and/or TSP G fund

    -5% in Vanguard Real Estate Index (REIT) Fund (VGSLX)

     

    I have a TSP account, i401k, personal and spousal Roths, and a taxable brokerage account

    Should I aim to have no bonds or REIT in my taxable account?

    Is there otherwise a big difference in where I should place my investments in the tax advantaged accounts, or should I just use the above overall strategy in each?

    As I rebalance in the future the bond/G fund percentage will increase but will likely keep the above overall strategy for the next 5-10 years.

     

    Thanks!

     

     

    Click to expand…

    If you want to mirror VTSAX, it’s 80% C and 20% S.

    VTIAX and I-Fund are not *completely* similar because I-Fund is just the EAFE, meaning it excludes emerging markets.  But close enough.

    For any bonds you may want, put regular bonds in tax-deferred like 401(k) or Traditional TSP and/or municipal bonds in taxable.  Be aware that munis introduce a sort of concentration risk, prob not significant, but possible.

    REIT I’d put in Roth IRA, unless you’re bearish on real estate, in which I’d put it in 401(k).  But, really, who knows?  It’s 5%, so prob won’t take up too much space, and you might be able to fit it all into one of your Roth IRAs.

    …anyway, that’s all good enough, and good enough is good enough.  If you try to gild the lily, you’re probably gonna end up messing something up.  It’s like setting your fantasy football lineup.

    "I like money." - Frito Pendejo (Idiocracy)

    [Not a financial professional (yet), lawyer, or employee of The White Coat Investor]

    #179614 Reply
    Avatar ottendave 
    Participant
    Status: Physician
    Posts: 11
    Joined: 03/15/2018

    thanks!

    #179689 Reply

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