No. of Recommendations: 0
Just as an example, if one has 10k in domestic stocks in a traditional IRA, and 10k in foreign stocks in a ROTH IRA… The effective allocation is not really 50% domestic / 50% foreign. In my mind, the only dollars that matter are the after tax dollars that go in my pocket. So if the expected tax rate during retirement is 25%, the allocation is really 43% domestic / 57 % foreign.

That's true, but if you're comparing apples to apples and taking taxes into consideration, you should compare both investments on a pretax basis. You put 10k into the TIRA pretax. But your $10K Roth IRA was about $13k pretax assuming a 25% tax rate. So your Roth allocation is, after taxes, > 50%, but you contributed more to it in the first place.

As it stands now, I agree that your example is weighted more than 50% in foreign stocks.


Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.