Breakdown of our investment portfolio from 2017 - 2019
As a follow up on this post from 2018, it's time to revisit how our retirement savings strategy is going and review the breakdown of our investment portfolio. We're still in the accumulation phase and our savings/investments are pretty much on auto-pilot mode, with focus on maximizing all tax-advantaged accounts first. While we're nowhere near the withdrawal phase yet, it's important to do a periodic check to make sure our investment portfolio is 'well-balanced' for future withdrawals.
As mentioned above, we try to maximize all tax-advantaged accounts first (for the tax benefits), which explains why the Pre-tax 401(k) bucket has been growing. I'm also including all gains for my Post-tax 401(k) within the Pre-tax 401(k) bucket as they are still subject to taxes in the future. We've been able to max out all tax-advantaged buckets in 2019, so any surplus has been going into the taxable bucket.
The numbers above are maximum contributions allowed for each tax-advantaged accounts.
Just to clarify, these are NOT our numbers. =P (*Did not max out)
Breakdown of our investment portfolio based on tax implications on withdrawal
Even though our tax-deferred bucket is growing larger (thanks to bull market), we're still diversified enough to have a pretty even split between our tax-free and tax-deferred bucket. The following is how we 'bucketed' each account based on the tax implications:
Tax-free (withdrawable): Post-tax 401k contributions, Roth IRA contributions
Taxable (withdrawable): Brokerage account
Tax-free (restrictions apply): Roth IRA earnings, HSA
Tax-deferred: Pre-tax 401k contributions (including employer contributions) and earnings, Post-tax 401k earnings, Traditional IRA contributions and earnings
The tentative withdrawal strategy will be based on the following sequence:
Taxable (withdrawable) → Tax-free (withdrawable) → Tax-free (restrictions apply) → Tax-deferred
I fully acknowledge the 'nerdiness' of this post. To be honest, it's really more for my own reference purposes. Refer to this post for more details on what all the different types of account represents.
May 2021 December 2019