Asset Allocation, Future retirement contributions

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xcskier
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Joined: Sun Jul 31, 2022 11:12 am

Asset Allocation, Future retirement contributions

Post by xcskier »

We have a lot of tax-free/deferred space as 2 public employees (age mid 30s) with 457bs in addition to 403b that we have been maxing (and roth ira, HSA)... For the past few years we have also been able to invest a in taxable after maxing all of this. But now have sharply rising expenses (childcare) with the same income so don't think we will be able to afford maxing all accounts.

If I anticipate needing to spend down taxable account in order to max retirement contributions in future years (simplest example is sell from taxable, convert to roth ira and re-invest, but could also imagine selling investments to pay some expenses while maxing pretax contributions)-- would this change how you invest this money currently in taxable?

Or is the ultimate distant investment horizon all that matters even if funds will be sold in a few years to convert to roth ira? This would either generate a TLH opportunity or I would have to pay tax on likely a relatively modest gain.
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