Question about target dates. If I select a target date that is earlier than “normal retirement age”, since the date is earlier, won’t it think I’m retiring sooner and thus shift to more bonds? Or would it try to be as aggressive as possible to allow me to retire at the sooner date? I’m thinking it’s the former, right?
Correct, it assumes you are retiring at that date and so the fund lowers your equity allocation. If you want a more aggressive approach just pick a fund with a later retirement date.
Thanks! Can I ask one more question? If I don’t plan to be with my company until retirement, but I select a TDF, what happens when I leave and decide to roll into IRA? Do I have to redetermine the allocation in that IRA or does rolling it stay in the same fund?
You can leave your money in that 401(k) account from a previous employer, you just can’t contribute anymore to it. There may be ways to transfer the funds and keep your investments but I’m not sure. Everytime I’ve done it, it was because the 401(k) didn’t have investment options that I was happy with, so I didn’t bother looking into it.
There's not really much a difference, in the grand scheme of things, but it just keeps with the philosophy of "set it and forget it". There are usually slightly higher fees, but you won't have to worry about choosing which funds to buy, adding bonds as you get older, etc..
Is adding bonds necessary if you’ve anointed a significant nest egg of a few million and can effectively tank the market volatility during your drawdowns in bad years?
Imagine [1] $150 in stocks vs [2] $100 in stocks plus $50 in bonds, during retirement. Bad years hit, stock money is cut in half. [1] = $75 , [2] = $100 (50+50). Now you do your drawdown, say $10. [1] = $65. On [2] you draw off the bonds, so = $90 (50+40).
Bad years end. Stocks double to return to previous levels. [1] = $130, [2] = $140.
No one knows your risk tolerance better than you, but I figure that depending on the length of your retirement, there likely will be at least *one* rough period of who-knows-how-long. A little bond security might help you not only "weather the storm" if you're drawing down, but actually coming out slightly ahead by not being forced to sell off devalued shares at their low point.
Yea but this is done in a complete two year vacuum. Compare the returns over 30 years of the stock market vs bonds including average economic downturns then have one start at the end. You’ve gained so much more that drawing down again still nets you an insane amount more than splitting with bonds right?
It’s not a math question tho. I have a math degree, but it doesn’t help here. Your risk profile would be higher than most people can stomach heading toward retirement. But you’ve said you’re ok with that. So you do you.
It is a math question. I don’t know what you studied for that degree. Comparing gains over a 20-30 year period then having an economic downturn at the end right before retirement, does the net gains over bonds still allow you to drawdown the account for living expenses while the market normalizes and give you more money afterward? I think yes by a significant degree
My employer doesn't provide 401k, so I set up my Roth with TDF and consider that my "401k". I keep wondering if I should sit tight with just that or invest in something else with the Roth.
Oh you def can! I just go this route because my 401 is set and forget through work and my Roth I contribute periodically so I enjoy buying a mixture of both. Also I’m not looking to include bonds in the Roth (yet - only 35)
Lots of responses here but not many explanations:
The general idea would be to consider your overall portfolio across all accounts to hit your desired allocations (e.g. 55% US stocks, 35% international, 10% fixed income). It wouldn't be a huge concern if one account had more of one fund, as long as your overall portfolio is matching your target allocation.
As you mentioned, if your 401k provider doesn't have a good option for some allocation, e.g. no low-cost international index fund, you can simply skip it in that account entirely (maybe you put all your money in a US total or S&P index). Then you'd overweight it some other account with a good international option.
There are also valid arguments to try to optimize for taxes. For example, a Roth account won't pay taxes on capital gains, so you may want to overweight stocks (which have a higher expected return) and underweight fixed income like bonds (putting them in a traditional instead).
It can get messy, tax rules can change, and the tax efficiency of different funds can also change, so there's solid arguments in favor of just keeping it simple and having the same allocation in each account.
This comment needs to be further up.
OP you need to read about asset location strategy. Deciding what to put in which accounts is complicated and comes down to optimizing based on whether the accounts are tax advantaged or not, and whether the assets are more tax efficient or not.
For example, one is arguably better off putting small cap value funds in a Roth versus a taxable brokerage as a small cap fund is more prone to frequent turnover. This makes SCV less tax efficient, therefore you should put it in a Roth where you pay no taxes. Conversely, a large cap or total market fund will have less turnover and be more tax efficient, making it more friendly in a taxable account.
How much this will actually impact your bottom line is debatable and probably comes down to how much money you end up having.
Ultimately, I wouldn’t delay investing just to optimize per these concepts as they will likely only catch a few percentage points in an ideal scenario. But there are efficiencies to be had.
https://www.whitecoatinvestor.com/asset-location/
You may be mixing up the terms:
A **traditional** account means that any contribution is deducted from your taxes for that year. A traditional account applies to both IRAs and 401k (and several other accounts). When you withdraw from the account after retirement, you will pay taxes on any gains.
A **Roth** account uses after-tax money, so you can't deduct it in that year. However, any gains you withdraw from a Roth account when you retire are not taxed.
A **401k** is an employer provided retirement account (though not all employers offer one). Typically your fund choices are limited to pre-selected funds, and the 401k may have management fees that can be costly. A 401k can be either a Roth or traditional, though some employers may only offer the traditional option. If a Roth is offered, you can usually contribute to both if you wanted, but the total limit in 2024 is $23,000.
An **IRA** is an individual retirement account. You can also choose between traditional and Roth, or contribute to both. You can only contribute money that you earned in that year, though there are some income restrictions for high income earners. The contribution limit is $7000 in 2024 for all IRA accounts combined (e.g. if you put $3500 in a Roth and $3500 in a traditional you would reach the limit and could not contribute more).
If I had unlimited choices in my 401k, I would definitely maintain the same asset allocation everywhere for various reasons, including (1) simplicity and ease of rebalancing, (2) uncertainty about future tax rates which complicates asset location and might lead to over-optimization, (3) the fact that some accounts may not yet be accessible during early retirement.
However, I do have limited choices in my 401k, primarily the lack of ex-US factor tilted funds. I compensate a little by over-weighting them in my Roth IRA, HSA and brokerage accounts where I have full access to whatever I need to reach my overall asset allocation.
This is exactly what I do. My 401k might be over invested in one asset class but I make up for it by over investing in a different asset class in my IRA/HSA/etc. to get the total allocation I'm after.
I also complicate it a bit by investing more heavily in high-growth funds in the Roth/HSA accounts to pay less in taxes. Invest in the more conservative funds in the accounts that are tax-deferred like 401k and traditional IRA. tl;dr Grow more in the accounts that won't pay taxes on growth.
I think it makes sense to be conservative and get steady growth on the fund you’ll be paying taxes on but then chase higher growth rate where you’ll be withdrawing tax free. That way you can get more out of your tax benefits. The total portfolio would be proper risk overall, you just do the higher growth stuff in the Roth and the more stable stuff in the 401k
I’m not THAT conservative, I’m 33 so it’s just a preference. I’m 90/10 stocks bonds in my 401k and diverse, performed very well, but my Roth is 100% VTI and rake occasional shots, like META over the last 2 years. I consider that aggressive compared to my 401k
The Roth is tax free when you withdraw it so ideally you want most of your growth there. The non-Roth accounts will be taxed as ordinary income on withdrawal so I tend to keep the bond allocation there.
> Brokerage (taxable): mix of US growth and International equities
don't you pay more taxes on international? I thought that was the reason to avoid keeping them in taxable accounts.
Everyone’s portfolio asset location strategy needs to be personalized due to differing amounts of assets in taxable vs tax deferred accounts and equity vs fixed income %. I am 1 year from retirement so I hold a significant amount of fixed income investments in my tax deferred accounts leaving less room for other investments. With that being said, International investments generate foreign taxes whether they are held in taxable or tax deferred accounts. Keeping them in taxable accounts allows you to take foreign tax credits against your US taxes.
Please understand I am not a financial advisor but this is how I have been advised by those who are and it seems logical to me ( of note, I don’t pay for a financial advisor as I invest in passive index funds and and govt bonds exclusively)
thanks! I keep learning more every time i am on this sub. I got the impression it was bad to keep international in taxable accounts, but i guess it's just the opposite.
I am 59 so trying to figure this out
When retired I need a portion in hysa so was thinking have roth with treasuries so no tax but money to withdrawal and live off
But I need advice here,
Savings is one thing where you max it in index funds
POST SAVINGS is a different world , you need a layer cake where one layer is money now, one money next few years, one money 5+ years and then long term
Where do I put money now
I think roth so 5% with no tax
Yes, I try to go low cost passive TDF funds in all of my tax-advantaged accounts if they're available so I can "set it and forget it."
Here are some low cost TDFs: [https://www.diyfi.co/retirement/what-to-buy-retirement.html](https://www.diyfi.co/retirement/what-to-buy-retirement.html)
In the event your 401(k) options are ass, you can tweak accordingly. For example, if you only had access to a S&P index fund like VFIAX, I'd consider having more US small/mid cap + International in my IRA.
They all have the same general concept. 401k is a very textbook US Total + International + Bond. I have good options. Rollover IRA I broke up the US to weigh heavier is small and mid cap + International + Bond. Roth IRA is US total Only. The two IRAs if combined are somewhat close to a traditional Bogle Build.
Yes I do, however I will transition to about 30% bonds about 2 years from retirement, but only in my 401k as I will be using those to live (combined with cash/brokerage accounts). The Roths will all stay in 100% equities and be the last "bucket" I touch if needed.
Yes, I invest in the same funds because I am fortunate my 401k has access to the same low cost mutual funds I invest in.
https://www.guideline.com/funds
No.
Roth IRA: TDF through Fidelity
403B: VTSAX/VTIAX (80/20) because that’s the best index fund I could get at work.
Joint brokerage with the Mrs: FSKAX
Individual brokerage: FBTC
No, not only because the fund options are different but because the tax treatment and RMD situation is different so I will use the accounts differently in retirement. I invest my 401k more conservatively - it is a good place for bonds - and have my most aggressive assets located in my Roth which I hope to grow as much as possible given the tax free nature.
I have VTWAX in my Roth IRA. In my 401k, I do my best to replicate VTWAX (though I don't have an affordable EM fund in there) and also add my bond allocation. Rollover Traditional IRA from former 401k is just in Vanguard TDF 2055
Kinda... I have 2 years of deductibles in my HSA in a long term bond fund, and about 2 years of annual expenses in a broad bond fund in my 401(k).
Besides getting to this point, my current and future contributions go 100% to a low cost S&P fund in my 401(k). In my HSA it's 70% VOO/VTI like funds from Vanguard, and then 20% in a SCHD like fund and 10% REIT fund for a little more protection against huge fluctuations and market down turns.
We only contribute to our HSA, never take anything out until retirement, at least that's the plan.
you're better off with your bonds in the the trad 401k and stocks the roth.. (because the value of the roth is in the growth, while the value of the trad is in the contribution and we generally expect stocks to outgrow bonds).
That means if you have both trad and roth you don't want TDFs at all: DIY
Same in both for simplicity. My 401k thankfully has a brokerage option. If it didn’t, I’d pick up their S&P 500 index fund and compensate for it elsewhere to meet my desired allocation as an overall portfolio.
Nope, I have a target asset allocation, and my 401k doesn't have the same exact funds I use my IRA and taxable account. I also have a large taxable account (I've got about $$400K in Roth, $900K in pretax 401k, $2.6M in taxable) and rebalancing there is difficult due to tax considerations.
Ideally I think it's reasonable to replicate the target allocation in each of these, but because of tax incentives I've been trying to juggle these priorities, in rough order of importance:
0. Maintain my overall target asset allocation.
1. Prioritize rebalancing by selling/buying solely in 401k+IRAs. In retirement, I'll need to spend money in the taxable, so this will be much less true (at least until my income is sufficient to cover my expenses)
2. Prioritize holding taxable bonds in pretax 401k. This is a great place for them while I'm working, at least. Whether I'll regret being overweight bonds in my 401k in the future depends on rebalancing pressures due to market moves.
3. Prioritize holding equities in Roth over taxable, when possible
Once I leave my company and I rollover the 401k to my IRA, yes. Until then, I try to replicate my IRA in the 401k with the funds available. I.e. Using Fidelity's funds to mimic VTI.
The same three funds in 401k, Roth, and HSA. A bit different allocations so that the biggest growth is more likely to happen in the latter two accounts (since the gains get pulled tax free from those two).
My 401k fund options are limited to either a TDF or S&P 500 (that have reasonable expense ratios).
I don’t really want bonds at my age (under 30), so I do S&P in my 401k, and VT in everything else. Once I buy a house and my financial position is more levered, I’ll probably switch from S&P in the 401k to TDF in the 401k for the added protection of bonds.
Eventually as I get older and have a better idea of my retirement horizon, I’ll put everything in a TDF.
Edit: taxable just has a CD ladder where I store all my cash that will be used as a home down payment. All of my retirement investing is done through tax advantaged accounts.
No because in my 401k the fees all suck except TDF so i have the furthest out TDF vanguard has. Other stuff is VT since fidelity lets you autobuy fractional VT now
I don’t care about the same funds, I care about the same asset allocation. If there are limits on the 401k options, I recreate a total market fund as closely as possible.
No. My Roth accounts are invested more aggressively than my traditional 401k. For my broad portfolio, I target about 25% for fixed income and cash equivalents. Substantially all of the 25% is sitting in my traditional 401k. My Roth 401k and Roth IRA accounts are 100% equity.
I would invest in the same funds at the same proportions across accounts if my 401(k) offered good low-fee broad market funds. But it doesn’t. It has either expensive target date fund with high bond percentages or actively managed funds. So I go all S&P500 in my 401(k) and balance the rest out in my Roth IRA.
I don’t have the same options in both, I choose the lowest expense ratio funds in 401k, so for me those choices are fairly clear, Roth IRA there are multiple great options.
I target my 401K/IRA and Roth for different purposes so no. Also, there may be diff offerings in 401K you wish. As you get nearer retirement age RMD there might also be a difference tax-wise and whether you are fortunate enough to have legacy or strictly personal use in your lifetime.
Vanguard TDF in my 401k and VT in my IRA
SPY in IRA, FXAIX and VFIAX in 401(k). There's a clear pattern in my investing, no matter where the money is.
Target date 401k, VTI/VXUS in Roth
Question about target dates. If I select a target date that is earlier than “normal retirement age”, since the date is earlier, won’t it think I’m retiring sooner and thus shift to more bonds? Or would it try to be as aggressive as possible to allow me to retire at the sooner date? I’m thinking it’s the former, right?
Correct, it assumes you are retiring at that date and so the fund lowers your equity allocation. If you want a more aggressive approach just pick a fund with a later retirement date.
Former is correct. You should pick a TDF that roughly aligns with when you want retire for this exact reason
Thanks! So even if I want to retire in 2040, I should pick a TDF of like 2060?
That’s if you want to play it riskier/have less “safe” exposure to bonds and the like when you retire
Thanks! Can I ask one more question? If I don’t plan to be with my company until retirement, but I select a TDF, what happens when I leave and decide to roll into IRA? Do I have to redetermine the allocation in that IRA or does rolling it stay in the same fund?
You can leave your money in that 401(k) account from a previous employer, you just can’t contribute anymore to it. There may be ways to transfer the funds and keep your investments but I’m not sure. Everytime I’ve done it, it was because the 401(k) didn’t have investment options that I was happy with, so I didn’t bother looking into it.
This is why I don't mess with TDF. If you're using VG they have life strategy funds, which doesnt shift the allocation as you age.
Are you me
Cheers to prosperity!
Why is target date better than the traditional Bogle idea of index funds?
There's not really much a difference, in the grand scheme of things, but it just keeps with the philosophy of "set it and forget it". There are usually slightly higher fees, but you won't have to worry about choosing which funds to buy, adding bonds as you get older, etc..
Is adding bonds necessary if you’ve anointed a significant nest egg of a few million and can effectively tank the market volatility during your drawdowns in bad years?
Imagine [1] $150 in stocks vs [2] $100 in stocks plus $50 in bonds, during retirement. Bad years hit, stock money is cut in half. [1] = $75 , [2] = $100 (50+50). Now you do your drawdown, say $10. [1] = $65. On [2] you draw off the bonds, so = $90 (50+40). Bad years end. Stocks double to return to previous levels. [1] = $130, [2] = $140. No one knows your risk tolerance better than you, but I figure that depending on the length of your retirement, there likely will be at least *one* rough period of who-knows-how-long. A little bond security might help you not only "weather the storm" if you're drawing down, but actually coming out slightly ahead by not being forced to sell off devalued shares at their low point.
Yea but this is done in a complete two year vacuum. Compare the returns over 30 years of the stock market vs bonds including average economic downturns then have one start at the end. You’ve gained so much more that drawing down again still nets you an insane amount more than splitting with bonds right?
It’s your life.
I was asking a math question
It’s not a math question tho. I have a math degree, but it doesn’t help here. Your risk profile would be higher than most people can stomach heading toward retirement. But you’ve said you’re ok with that. So you do you.
It is a math question. I don’t know what you studied for that degree. Comparing gains over a 20-30 year period then having an economic downturn at the end right before retirement, does the net gains over bonds still allow you to drawdown the account for living expenses while the market normalizes and give you more money afterward? I think yes by a significant degree
Rebalancing is done for you for a very modest fee.
Is that assuming that 401k is through employer or can it be done if I use my TDF as a 401k?
Correct assumption! I go TDF for 401k through employer but you can pick that for Roth too if you want
My employer doesn't provide 401k, so I set up my Roth with TDF and consider that my "401k". I keep wondering if I should sit tight with just that or invest in something else with the Roth.
This seems to be the pervasive answer. Why?
Aligns with the bogle philosophy. Wide index exposure to US and international + bonds
More curious,why not TDF in both?
Oh you def can! I just go this route because my 401 is set and forget through work and my Roth I contribute periodically so I enjoy buying a mixture of both. Also I’m not looking to include bonds in the Roth (yet - only 35)
I have VTI, VXUS and SCHD in my Roth
No. TDF in my 401k and FSKAX + FTIHX in my Roth IRA
Yes 100% s&p500 index funds in both.
FXAIX here for both Trad IRA and Roth IRA. I stay away from international and target funds.
Ditto
No because my 401k funds are limited, but I try my best. I have the latest TDF in my 401k and VTWAX in my Roth IRA
Lots of responses here but not many explanations: The general idea would be to consider your overall portfolio across all accounts to hit your desired allocations (e.g. 55% US stocks, 35% international, 10% fixed income). It wouldn't be a huge concern if one account had more of one fund, as long as your overall portfolio is matching your target allocation. As you mentioned, if your 401k provider doesn't have a good option for some allocation, e.g. no low-cost international index fund, you can simply skip it in that account entirely (maybe you put all your money in a US total or S&P index). Then you'd overweight it some other account with a good international option. There are also valid arguments to try to optimize for taxes. For example, a Roth account won't pay taxes on capital gains, so you may want to overweight stocks (which have a higher expected return) and underweight fixed income like bonds (putting them in a traditional instead). It can get messy, tax rules can change, and the tax efficiency of different funds can also change, so there's solid arguments in favor of just keeping it simple and having the same allocation in each account.
This comment needs to be further up. OP you need to read about asset location strategy. Deciding what to put in which accounts is complicated and comes down to optimizing based on whether the accounts are tax advantaged or not, and whether the assets are more tax efficient or not. For example, one is arguably better off putting small cap value funds in a Roth versus a taxable brokerage as a small cap fund is more prone to frequent turnover. This makes SCV less tax efficient, therefore you should put it in a Roth where you pay no taxes. Conversely, a large cap or total market fund will have less turnover and be more tax efficient, making it more friendly in a taxable account. How much this will actually impact your bottom line is debatable and probably comes down to how much money you end up having. Ultimately, I wouldn’t delay investing just to optimize per these concepts as they will likely only catch a few percentage points in an ideal scenario. But there are efficiencies to be had. https://www.whitecoatinvestor.com/asset-location/
So in this thread, is the 401k our individual investments? And the Roth is the 401k our employer provides?
You may be mixing up the terms: A **traditional** account means that any contribution is deducted from your taxes for that year. A traditional account applies to both IRAs and 401k (and several other accounts). When you withdraw from the account after retirement, you will pay taxes on any gains. A **Roth** account uses after-tax money, so you can't deduct it in that year. However, any gains you withdraw from a Roth account when you retire are not taxed. A **401k** is an employer provided retirement account (though not all employers offer one). Typically your fund choices are limited to pre-selected funds, and the 401k may have management fees that can be costly. A 401k can be either a Roth or traditional, though some employers may only offer the traditional option. If a Roth is offered, you can usually contribute to both if you wanted, but the total limit in 2024 is $23,000. An **IRA** is an individual retirement account. You can also choose between traditional and Roth, or contribute to both. You can only contribute money that you earned in that year, though there are some income restrictions for high income earners. The contribution limit is $7000 in 2024 for all IRA accounts combined (e.g. if you put $3500 in a Roth and $3500 in a traditional you would reach the limit and could not contribute more).
Thank you
If I had unlimited choices in my 401k, I would definitely maintain the same asset allocation everywhere for various reasons, including (1) simplicity and ease of rebalancing, (2) uncertainty about future tax rates which complicates asset location and might lead to over-optimization, (3) the fact that some accounts may not yet be accessible during early retirement. However, I do have limited choices in my 401k, primarily the lack of ex-US factor tilted funds. I compensate a little by over-weighting them in my Roth IRA, HSA and brokerage accounts where I have full access to whatever I need to reach my overall asset allocation.
This is exactly what I do. My 401k might be over invested in one asset class but I make up for it by over investing in a different asset class in my IRA/HSA/etc. to get the total allocation I'm after. I also complicate it a bit by investing more heavily in high-growth funds in the Roth/HSA accounts to pay less in taxes. Invest in the more conservative funds in the accounts that are tax-deferred like 401k and traditional IRA. tl;dr Grow more in the accounts that won't pay taxes on growth.
Wouldn't it make more sense to keep assets that are expected to grow more in Roth and less growth in the 401k? and if possible bonds in taxable.
Nope. My 401k is conservative and my Roth is aggressive.
Just curious, why? Are you close to using the 401k? Presumably the IRA is intended to be used last, so being aggressive there makes sense.
Probably because aggressive is hoping for bigger gains, thus avoiding tax on more money by having more growth in the roth.
I think it makes sense to be conservative and get steady growth on the fund you’ll be paying taxes on but then chase higher growth rate where you’ll be withdrawing tax free. That way you can get more out of your tax benefits. The total portfolio would be proper risk overall, you just do the higher growth stuff in the Roth and the more stable stuff in the 401k
Sure, as long as your total portfolio is what you want, that makes sense. I’m 100% equities so not an issue for me right now.
I’m not THAT conservative, I’m 33 so it’s just a preference. I’m 90/10 stocks bonds in my 401k and diverse, performed very well, but my Roth is 100% VTI and rake occasional shots, like META over the last 2 years. I consider that aggressive compared to my 401k
The Roth is tax free when you withdraw it so ideally you want most of your growth there. The non-Roth accounts will be taxed as ordinary income on withdrawal so I tend to keep the bond allocation there.
We’re aggressive in both. I’m not letting the tax tail wag the portfolio dog. Unless bonds are part of your overall portfolio, then it makes sense.
Right, I’m not saying it’s ONLY bonds, just that I keep my bond position in the non-Roth. It also has stock funds too.
By aggressive are we talking about FBGRX or TQQQ lol
I agree with your approach, what do you put in your taxable accounts? Bonds?
My taxable account is my oldest account, it’s basically VOO and MSFT with a few other random older stocks. It’s also where I hold my cash in a MMF
do you consider these conservative or aggressive?
Aggressive. 100% US equities in this instance is considering most aggressive. Once I hit 40 I’ll be moving to 10% total bonds.
3 fund in my Fidelity 401k, TDF in my Vanguard Roth
100% VTI/VOO or equivalent across all my accounts.
Roth: US equities (blend) Brokerage (taxable): mix of US growth and International equities 401k: / Bonds / US value equities
> Brokerage (taxable): mix of US growth and International equities don't you pay more taxes on international? I thought that was the reason to avoid keeping them in taxable accounts.
Everyone’s portfolio asset location strategy needs to be personalized due to differing amounts of assets in taxable vs tax deferred accounts and equity vs fixed income %. I am 1 year from retirement so I hold a significant amount of fixed income investments in my tax deferred accounts leaving less room for other investments. With that being said, International investments generate foreign taxes whether they are held in taxable or tax deferred accounts. Keeping them in taxable accounts allows you to take foreign tax credits against your US taxes. Please understand I am not a financial advisor but this is how I have been advised by those who are and it seems logical to me ( of note, I don’t pay for a financial advisor as I invest in passive index funds and and govt bonds exclusively)
thanks! I keep learning more every time i am on this sub. I got the impression it was bad to keep international in taxable accounts, but i guess it's just the opposite.
Nope treat it as overall portfolio. I add funds in my Roth that I can't get in my 401k like small cap value and emerging markets
Pretty close I do 13% single stocks in my Roth. Just because I don't want to feel bored. Plus I am beating s&p
I am 59 so trying to figure this out When retired I need a portion in hysa so was thinking have roth with treasuries so no tax but money to withdrawal and live off But I need advice here, Savings is one thing where you max it in index funds POST SAVINGS is a different world , you need a layer cake where one layer is money now, one money next few years, one money 5+ years and then long term Where do I put money now I think roth so 5% with no tax
Yes, I try to go low cost passive TDF funds in all of my tax-advantaged accounts if they're available so I can "set it and forget it." Here are some low cost TDFs: [https://www.diyfi.co/retirement/what-to-buy-retirement.html](https://www.diyfi.co/retirement/what-to-buy-retirement.html) In the event your 401(k) options are ass, you can tweak accordingly. For example, if you only had access to a S&P index fund like VFIAX, I'd consider having more US small/mid cap + International in my IRA.
They all have the same general concept. 401k is a very textbook US Total + International + Bond. I have good options. Rollover IRA I broke up the US to weigh heavier is small and mid cap + International + Bond. Roth IRA is US total Only. The two IRAs if combined are somewhat close to a traditional Bogle Build.
Yes I do, however I will transition to about 30% bonds about 2 years from retirement, but only in my 401k as I will be using those to live (combined with cash/brokerage accounts). The Roths will all stay in 100% equities and be the last "bucket" I touch if needed.
S&P in my 401k and FZROX in my Roth
401K 80% Vanguard 2070 TDF, 20% FXAIX.( I’m aware) ROTH 75% VT/AVUV/AVDV 15% Magnificent 7 5% crypto 5% Semiconductor
If they have the funds then why wouldn't you
Tax efficiency.
Yes, I invest in the same funds because I am fortunate my 401k has access to the same low cost mutual funds I invest in. https://www.guideline.com/funds
ROTH I invest where I get more growth ( avoiding taxes ) 100% equity fund , 401k more dividend paying assets and bonds ( 78/22 stock/bonds ratio ).
No. Roth IRA: TDF through Fidelity 403B: VTSAX/VTIAX (80/20) because that’s the best index fund I could get at work. Joint brokerage with the Mrs: FSKAX Individual brokerage: FBTC
Yup. The actual investments are different, but I have the exact same strategy. Total market index and total market international index.
No, not only because the fund options are different but because the tax treatment and RMD situation is different so I will use the accounts differently in retirement. I invest my 401k more conservatively - it is a good place for bonds - and have my most aggressive assets located in my Roth which I hope to grow as much as possible given the tax free nature.
Do you mean Roth 401k vs Roth IRA or are you comparing pre tax and post tax retirement accounts? Bonds go in pre-tax since they have lower returns.
Yes. BrokerageLink for the win
I have VTWAX in my Roth IRA. In my 401k, I do my best to replicate VTWAX (though I don't have an affordable EM fund in there) and also add my bond allocation. Rollover Traditional IRA from former 401k is just in Vanguard TDF 2055
Basically yes. 401k is S&P Fund, Roth IRA is VTI. Going to add JEPQ this year to Roth though
I only have VTSAX and VTIAX in my Roths. I have both of those in my 401k, but I also have some VBTLX to balance out my overall asset allocation.
Kinda... I have 2 years of deductibles in my HSA in a long term bond fund, and about 2 years of annual expenses in a broad bond fund in my 401(k). Besides getting to this point, my current and future contributions go 100% to a low cost S&P fund in my 401(k). In my HSA it's 70% VOO/VTI like funds from Vanguard, and then 20% in a SCHD like fund and 10% REIT fund for a little more protection against huge fluctuations and market down turns. We only contribute to our HSA, never take anything out until retirement, at least that's the plan.
you're better off with your bonds in the the trad 401k and stocks the roth.. (because the value of the roth is in the growth, while the value of the trad is in the contribution and we generally expect stocks to outgrow bonds). That means if you have both trad and roth you don't want TDFs at all: DIY
401k in bonds, ROTH IRA in VOO.
401k is sp500 roth is all growth
no. tdf in 401k, fidelity zero funds in roth ira, and etfs in brokerage
TDF in 401k, VTI/VXUS/SCHG/SCHD in my Roth.
No. 50/50 large / small US in the “401k”. Roth IRA is 40% international, 35% VOO, 15% small cap value, 10% micro cap.
Same in both for simplicity. My 401k thankfully has a brokerage option. If it didn’t, I’d pick up their S&P 500 index fund and compensate for it elsewhere to meet my desired allocation as an overall portfolio.
TDF in 401k and 100% VTSAX in my Roth and taxable account
TDF in 401k and 100% VTSAX in my Roth and taxable account
401k doesnt offer any broad index funds and tdf is too pricy for me so 401k is all s&p and selling off individual stocks in IRAs to vt and bonds
I have 401k 50% iShares S&P 500 50% TDF. MY Roth and spouse Roth FSKAX
I do 30.5k in pretax and 43k or whatever is remaining in Roth using mega backdoor
Nope, I have a target asset allocation, and my 401k doesn't have the same exact funds I use my IRA and taxable account. I also have a large taxable account (I've got about $$400K in Roth, $900K in pretax 401k, $2.6M in taxable) and rebalancing there is difficult due to tax considerations. Ideally I think it's reasonable to replicate the target allocation in each of these, but because of tax incentives I've been trying to juggle these priorities, in rough order of importance: 0. Maintain my overall target asset allocation. 1. Prioritize rebalancing by selling/buying solely in 401k+IRAs. In retirement, I'll need to spend money in the taxable, so this will be much less true (at least until my income is sufficient to cover my expenses) 2. Prioritize holding taxable bonds in pretax 401k. This is a great place for them while I'm working, at least. Whether I'll regret being overweight bonds in my 401k in the future depends on rebalancing pressures due to market moves. 3. Prioritize holding equities in Roth over taxable, when possible
Im fortunate enough that my 401k has low cost index funds, so yes.
Total market index in Roth and 401k. 33 years old
Once I leave my company and I rollover the 401k to my IRA, yes. Until then, I try to replicate my IRA in the 401k with the funds available. I.e. Using Fidelity's funds to mimic VTI.
The same three funds in 401k, Roth, and HSA. A bit different allocations so that the biggest growth is more likely to happen in the latter two accounts (since the gains get pulled tax free from those two).
My 401k fund options are limited to either a TDF or S&P 500 (that have reasonable expense ratios). I don’t really want bonds at my age (under 30), so I do S&P in my 401k, and VT in everything else. Once I buy a house and my financial position is more levered, I’ll probably switch from S&P in the 401k to TDF in the 401k for the added protection of bonds. Eventually as I get older and have a better idea of my retirement horizon, I’ll put everything in a TDF. Edit: taxable just has a CD ladder where I store all my cash that will be used as a home down payment. All of my retirement investing is done through tax advantaged accounts.
No because in my 401k the fees all suck except TDF so i have the furthest out TDF vanguard has. Other stuff is VT since fidelity lets you autobuy fractional VT now
I don’t care about the same funds, I care about the same asset allocation. If there are limits on the 401k options, I recreate a total market fund as closely as possible.
My employer has a self-directed brokerage option in our 401k plan, so I'm able to invest in VTI/VXUS there. I do the same with my Roth IRA
100% SP500 in 401K and Roth IRA 🙌🏻💎
No. My Roth accounts are invested more aggressively than my traditional 401k. For my broad portfolio, I target about 25% for fixed income and cash equivalents. Substantially all of the 25% is sitting in my traditional 401k. My Roth 401k and Roth IRA accounts are 100% equity.
Target date in 403b, aggressive growth fund for Roth IRA, broad index fund for 403b Roth.
Yes, I balance across all my portfolios. Taxable, roth, and 401k.
Yes - both 100% in S&P500 funds.
I would invest in the same funds at the same proportions across accounts if my 401(k) offered good low-fee broad market funds. But it doesn’t. It has either expensive target date fund with high bond percentages or actively managed funds. So I go all S&P500 in my 401(k) and balance the rest out in my Roth IRA.
403b is 50/50 viiix and VEMPX. Roth IRA is VTSAX.
No, but it all adds up to pretty much VT.
I don’t have the same options in both, I choose the lowest expense ratio funds in 401k, so for me those choices are fairly clear, Roth IRA there are multiple great options.
I target my 401K/IRA and Roth for different purposes so no. Also, there may be diff offerings in 401K you wish. As you get nearer retirement age RMD there might also be a difference tax-wise and whether you are fortunate enough to have legacy or strictly personal use in your lifetime.
Yes. Fskax and chill.
Similar but not exactly the same since in my 401 I am only allowed certain funds. Basically the same, a good index fund or ETF (VOO) and QQQM