Personal Investments • Portfolio Allocation Disarray - Set Me Straight

Tax Rate: 20% (I thought this would be higher, but went by the 2023 taxes paid / taxable income calculation)

What we are looking for here is your tax bracket. And it probably is higher than 20%.

Updated

* An unusually high amount in HYSA and Money Market due to hesitation in lump sum investing. Auto investment set to dollar cost average.​As mentioned earlier, this high amount of cash indicates that you are not comfortable with the AA (stock to bond ratio) that you said you wanted. A full 56% of your portfolio is sitting on the sidelines! This makes your current AA about 35%ish stocks and you say you want to be at 85% stocks.

There's a disconnect there and it needs to be figured out. What do you think is causing this? Do you think you can learn your way past it or do you think it will not change?

Strongly believe I just need a nudge in that direction, which I'm getting from this forum. I went from minimal auto investing ($100's of dollars per month in brokerage) to $4,000. I've waded into the water, just about ready to swim.

** I am guilty of historically chasing high dividend paying funds.

Are you ready to give this up? Or do you want to keep a little bit? Know that dividend paying funds in your taxable account just raise your taxable income without giving you any more money.

Ready for set it and forget it regarding the majority of our portfolio. Might keep a little extra on the side to play around with, scratch the itch if you will.

** We will start contributing to Traditional IRA this year since we cannot perform backdoor ROTH due to the rollover IRA.​

You should not contribute to tIRA because your contributions would not be deductible. You have indicated that your 401k has higher fees than you want and rolling the rollover IRA into the 401k is not an attractive option. You also think you may not leave this job for awhile. That means you should put your "IRA money" into taxable instead of IRA.

Doesn't a non deductible tIRA provide tax sheltered growth? Or am I getting something confused?

Emergency Fund: 6+ months

Is this part of the HYSA? Or not included in what you showed us?

Emergency fund is included in HYSA.

With early retirement as a main focus, what is the most tax efficient approach to diversifying our portfolio?
Get the target fund out of the taxable account. Get the dividend producing funds out of taxable. These things will improve your tax efficiency.

Will take appropriate course of action based on these recommendations.

Are dividend paying stocks/funds good to have in a taxable account?

No. Dividend funds do not increase your wealth.

They just cause unnecessary taxes.

I'm still a little confused on this one. Isn't some income or profit, even if paying taxes, better than none?

Statistics: Posted by Pioneer940 — Tue Jul 02, 2024 8:50 am — Replies 15 — Views 1246

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