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Asset allocation in multiple accounts

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  • Asset allocation in multiple accounts

    What is the preferred method to invest through multiple accounts.

    for example, if we have a Roth IRA, 401k, HSA. And TAxable account, what is the best way keep the goal assets allocation across all accounts.

    is it best to do 70 stocks/30 bonds (or whatever is best) across each account or do the 30% bonds in the tax advantaged accounts and then 70% in the taxable accounts + tax advantaged accounts.

  • #2
    There's an argument for doing both ways. I would say it's definitely most important to have tax efficient funds (stock index funds, no bonds) in taxable. For the other accounts, it really just changes your risk a little by having bonds in pre-tax vs Roth tax protected accounts.


    • #3

      View your portfolio as a whole.


      • #4
        Originally posted by Peds View Post
        Over the years, I have simplified my holdings to just 1 or 2 mutuals or ETFs in each type of account to approximate a 3-fund portfolio.
        I use the Physician on Fire's spreadsheet to see my entire asset allocation.
        The spreadsheet helps me determine if I've reached my rebalancing bands and helps me easily identify where I want to make the adjustment.



        • #5
          As others have stated, your portfolio is the sum of all accounts, so if you’re aiming for 70/30, then add up all accounts and find your split.

          How far away from retirement? You have three accounts that offer tax advantages, which could benefit capital gains and stock returns most. I’m also guessing you have access to a bond fund in the 401k? Are you looking to be active in bonds or are you just trying to hit a balance and diversity? It would depend on how much is in each account, but I’d play bonds in the 401k and stocks everywhere else - especially stocks in the Roth and HSA. Are you actively contributing to the 401k? This will give you constant ability to tweak your balance, but you may be limited to what bond funds you can pick.

          Personally, I’m not touching bonds right now, but I’m also over 10 years out. I’m 85% stock, 15% cash (cd ladder at 2% for next year).