Correction: In the first example, we noticed in our program we accidentally used a 60/40 rather than a 50/50 portfolio. The numbers will adjust slightly but the overall message remains the same. We apologize for this error.
Great video AGAIN. Recently became concerned about our Trad Ira balance. We are age 60 and on ACA insurance so no conversions. Will be going 100% percent bonds in Trad Ira and taxable roth accounts full growth. Pulling 30k from Trad Ira annually to meet standard deduction so no tax. Rest of income comes from Taxable account and no taxes 😂. Love your content
Hi, I just watched your video. Great suggestion. Here is my question. To start with, we can have Stocks in Roth, and Bonds in Traditional for a 50/50 allocation. After a couple of years, due to higher growth in Stocks and lower growth in Bonds let us say the allocation now become 60/40. Conventional wisdom says we need to rebalance my portfolios to get back to 50/50. How do we do that? We can’t be moving money from Roth to Traditional to achieve this. Can you suggest how do we go about?
Hey Rammohan, in the examples we gave, there will be an imbalance at times where it doesn't work out cleanly that 100% of growth assets fit into the the Roth and 100% of safe assets fit into the traditional IRA. In this case, you have to prioritize and overfill the rest. So if 50/50 gives you a $500,000 allocation to stocks but you only have $300,000 in Roth, then allocate 100% of the Roth to stocks overfill the rest in traditional IRA. The $700,000 traditional IRA would have $500,000 in bonds (in this example) and $200,000 in stocks. To rebalance, aggregate the account balances together and strategically locate assets from there. Hope this explanation helps
Note that you shouldn't say we want "lower" returns on IRA.... you should instead say we want "safer" returns on IRA , and oh by the way, they will consequently grow more slowly, so .... blah blah (all the benefits of the IRA growing at the lower rate) In other words we aren't placing conservative funds in the IRA for the lower returns, we are placing them in the IRA for the safer returns. But we still want some sporty growth....that we can seek in the Roth and we don't get the tax penalty if we actually receive our much sought after aggressive returns.
Yes, I apologize if that wasn't clear. You do not want to intentionally lower your returns to deal with RMDs. Thats like stepping over $1s to pick up dimes. If you're going to have safety (lower returns) in your retirement allocation, you want those allocated to tax-deferred accounts and growth allocated to Roth. Thanks for helping clear up any confusion. You're right on Skip
At about 8:10 into this video, “Example 1…” shows a tax rate of 15% at the bottom right. If you are buying stock(s) in the Roth and bonds in a Traditional IRA, taxes on the Roth should be zero and taxes on the Traditional IRA would be at regular income rates. Does the 15% Tax Rate reflect that or are you assuming long term capital gains rate of 15%? Thanks for the great videos!
Asset Coordination makes more sense than Asset Location (which has a connotation of GEOlocation, i.e. regional/geographical aspects of one’s equity allocation)
Lot of good info on you channel. At age 60+, after in place conversion of a 401k partial amount to a Roth 401k, and within 5 year time frame if taking distributions from Roth 401k, will there be a penalty on converted amount and earnings. Are there any restrictions. Thanks.
The RMD Deferral Is Only Temporary.. Google ~QLAC RMD Impact~.. If one of a couple passes before the QLAC payments the RMDs will be taxed at an even higher tax rate. Personal opinion only, I am not an expert.
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Correction: In the first example, we noticed in our program we accidentally used a 60/40 rather than a 50/50 portfolio. The numbers will adjust slightly but the overall message remains the same. We apologize for this error.
Great video AGAIN. Recently became concerned about our Trad Ira balance. We are age 60 and on ACA insurance so no conversions. Will be going 100% percent bonds in Trad Ira and taxable roth accounts full growth. Pulling 30k from Trad Ira annually to meet standard deduction so no tax. Rest of income comes from Taxable account and no taxes 😂. Love your content
Hi, I just watched your video. Great suggestion. Here is my question. To start with, we can have Stocks in Roth, and Bonds in Traditional for a 50/50 allocation. After a couple of years, due to higher growth in Stocks and lower growth in Bonds let us say the allocation now become 60/40. Conventional wisdom says we need to rebalance my portfolios to get back to 50/50. How do we do that? We can’t be moving money from Roth to Traditional to achieve this. Can you suggest how do we go about?
Hey Rammohan, in the examples we gave, there will be an imbalance at times where it doesn't work out cleanly that 100% of growth assets fit into the the Roth and 100% of safe assets fit into the traditional IRA. In this case, you have to prioritize and overfill the rest.
So if 50/50 gives you a $500,000 allocation to stocks but you only have $300,000 in Roth, then allocate 100% of the Roth to stocks overfill the rest in traditional IRA. The $700,000 traditional IRA would have $500,000 in bonds (in this example) and $200,000 in stocks.
To rebalance, aggregate the account balances together and strategically locate assets from there.
Hope this explanation helps
Note that you shouldn't say we want "lower" returns on IRA.... you should instead say we want "safer" returns on IRA , and oh by the way, they will consequently grow more slowly, so .... blah blah (all the benefits of the IRA growing at the lower rate) In other words we aren't placing conservative funds in the IRA for the lower returns, we are placing them in the IRA for the safer returns. But we still want some sporty growth....that we can seek in the Roth and we don't get the tax penalty if we actually receive our much sought after aggressive returns.
Yes, I apologize if that wasn't clear. You do not want to intentionally lower your returns to deal with RMDs. Thats like stepping over $1s to pick up dimes. If you're going to have safety (lower returns) in your retirement allocation, you want those allocated to tax-deferred accounts and growth allocated to Roth.
Thanks for helping clear up any confusion. You're right on Skip
At about 8:10 into this video, “Example 1…” shows a tax rate of 15% at the bottom right. If you are buying stock(s) in the Roth and bonds in a Traditional IRA, taxes on the Roth should be zero and taxes on the Traditional IRA would be at regular income rates. Does the 15% Tax Rate reflect that or are you assuming long term capital gains rate of 15%?
Thanks for the great videos!
You are so good at what you do! Thanks so much.
Thank you so much!
It would grow even faster if they did 100% stocks?😮
Asset Coordination makes more sense than Asset Location (which has a connotation of GEOlocation, i.e. regional/geographical aspects of one’s equity allocation)
Lot of good info on you channel. At age 60+, after in place conversion of a 401k partial amount to a Roth 401k, and within 5 year time frame if taking distributions from Roth 401k, will there be a penalty on converted amount and earnings. Are there any restrictions. Thanks.
?
What about using a QLAC to reduce the RMDs? I read it's not included in the calculation.
The RMD Deferral Is Only Temporary.. Google ~QLAC RMD Impact~.. If one of a couple passes before the QLAC payments the RMDs will be taxed at an even higher tax rate. Personal opinion only, I am not an expert.
Thanks for the video!
Thanks M!
@@SafeguardWealthManagement did you receive the two Bud T-shirt’s that I sent?
@@mlee1308 Yes sir! Thank you for those. They are awesome!