OK, so many (most?) of us here have set up a backdoor Roth IRA's to take advantage of tax free growth of stocks/dividends/interest for decades and tax-free withdrawals at retirement. It also has unique features regarding RMDs and therefore may be "the last dollars" we spend in retirement. I would think this is a good place for tax inefficient vehicles with long term growth potential. So what do you hold in your Roth?
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Mine is super small now. I think it depends where your other accounts are too. My 403b has vanguard funds (the usual us total, intl, bond), but not much else. So in my roth (at vanguard), I have REITS and a small cap fund. Some money is still in a target fund that I will move once it gets bigger. -
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Ours (mine and wife's) hold all of our international funds (Total International Admiral) because my international options in 403b as 457 have very high ERs. As my tax deferred numbers get bigger will move out of the Vanguard S&P 500 probably into more international.Comment
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Mine holds VNQ (vanguard reit) and a vanguard mid cap growth fund. I just recently started the Roth conversion process. I will convert the rest of my VNQ next year from a different Ira. I was surprised how simple the conversion process was at Vanguard.Comment
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My IPS mandates 100% equity in Roths, to maximimize long term tax free growth and as a long term legacy vehicle.
I put 50% VTSAX (US total stock) and 50% VSIAX (Small cap value) in mine and 50% VTIAX (total international stock) and 50% VSS (ex-US mid/small cap) in my wife's.
Every year we add and rebalance our Roths and also our overall portfolio.
I have access to Vanguard REIT seperately in my 401k.Comment
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I'm still in training (started 1 year fellowship at the beginning of the month) and have been aggressively paying down the loans while maxing the Roth IRA and funding my employers 403b to the max of the match. I invest in the cheapest index fund in my 403b (Vanguard Institutional Index) and balance the rest in Roth IRA. Since my Roth is much higher than the 403b, it has a mix of total stock, total bond, and total international stock to round out my 3 fund portfolio.Comment
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Ok so seems many share my view that Roth is a good place to hold REITs. I had been holding bonds in my Roth, but Since I have a pretty large taxable account already with some munis, I'm thinking of converting my whole bond allocation to taxable account with muni fund and filling Roth with reit (since it nicely fits my 10% reit allocation)Comment
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