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The turnover and tax efficiency doesn't matter much when you are just looking at retirment accounts. It is the expected return that you will get after all the expenses that you want to look at For example if you look at stocks verses bonds, you might expect stocks to have the higher total return over the years.

This gets complex because a dollar in a Roth is not worth the same as a dollar in the traditional deductable IRA because of taxes. For example if you are in the 25% combined tax bracket, then $1000 in a Roth is really worth the same as $1,333 in an IRA (1,333 * 75% = 1000 after tax dollars)

It turns out that if;
1) you are in the same tax bracket when you retire
2) You split the money between the accounts like in the example above.

Then you should put the higher performing asset in the IRA(with more money) since the money will compound over the years and grow more after it is taxed when withdrawn.

In this case if you wanted a true 50/50 stock and bond allocation in your retirement accounts, then I would put $1,000 in bonds in a Roth and $1,333 in stocks in the IRA.

A problem with this though is that it can make it difficult to rebalance since you can't just move the money between the accounts.

Greg
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