Personal Investments • Newbie portfolio review and questions

Thanks for the responses.

Which fund company is your employer's SIMPLE IRA with? Is that a 5304 plan or a 5305 plan?

Company is Ameriprise. I asked if it was 5304 vs 5305 and they said my advisor would get back to me on Monday. What difference does it make?

In my view, I would only hold equities in the Roth and hold any bond allocation in the simple IRA. I would want the Roth to grow as much as possible over your investing timeline and 100% equities likely will give the highest overall performance over the long term

Is this because the Roth is not taxed when I withdraw so it would benefit from up front taxes then growth afterwards, while the simple IRA is taxed during withdrawal so I would want investments with low returns (bonds) in there? As I said above, the Simple IRA fund company my employer uses is Ameriprise. I was under the impression that management of this account was left up to Ameriprise. Is it typical that I can request to manage my funds on my own with a fund company?

I would only hold equities such as a VTI fund or similar as it is tax efficient. Whatever you are using in your Roth and IRA, I would use a tax loss partner fund in your taxable. For example, if you choose VTI in your Roth and simple IRA, I would choose VOO in your taxable or vice versa. With stocks in the 95th percentile and you being 29 years old the likelihood of you at some point being able to tax loss harvest is almost a given. This setup will make it easy if and when the time comes.

I just did some research on tax loss harvesting. Following this plan, would my accounts look like this?
Roth IRA- Maxed out on VTI
Simple IRA- 20% of portfolio in bonds, rest in VTI
Taxable- Rest of the portfolio in VOO
I would sell VOO at a loss when possible to realize losses to lower my income while holding everything else. Is this correct? I'm a little confused- it seems like "tax loss partner" and "substitute" refer to the same thing. I if I TLH VOO in my taxable account and buy VTI forthe 31 days after, what does having VTI in my other accounts do?

In my mind, this is a grey area. With your state and local tax rate, I might consider a Cali muni fund but lean towards individual treasuries. If you think your income will go up over the next few years and tip you into the next tax bracket the muni fund would be my choice. I certainly would not be comfortable investing in equities with this time frame. I am sure others will give you better guidance.

I looked into municpal bonds, it sounds like they are a good choice for "high earners." I'm in the 24% tax bracket and the investopedia article on this says muni bonds are worth it at the 35% bracket, so I don't think this would apply to me. As for individual treasuries, are those the same as Tbills? Since I don't have a good idea of when I will want to need cash for a house down payment, would it be a good idea to just invest in low volatility investments like Tbills, then if I decide I won't need liquidity soon, to move that money into equities?

Statistics: Posted by Deneb — Thu Apr 25, 2024 2:38 am — Replies 3 — Views 382

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