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ICI: Roth IRA Investors More Aggressive, Make Fewer Withdrawals Than Traditional IRA Investors
Interesting to find out I fit the profile described. Have both a regular ira and a roth. In my late husband's infinite wisdom, he converted sizeable portion of his ira over his last five years, so the roth was the bigger portion. My roth is fairly aggressive with more than 80% in equities (article said average was 80%) and the ira is more moderate, although it is more than the 66% cited as equity, the rest of my bond allocation is in taxable account, and that will be drawn down first before touching the ira in 5 years. I slowly am increasing bond allocation to ira over next 5 years until it gets down to 66% equities
@slick: The Linkster applauds you in the handling of your late husband's IRA along with your Roth. I like your aggressive and moderate allocation stance. Regards, Ted
Thanks guys, I did make substantial changes to each over the last few years, kept some investments the same. We invested together and consulted one another quite often on stock and fund picks. He was a bit more conservative than I, but he was 8 years older. I can afford to keep the roth aggressive since I may not have to tap it, or t least not for 15 years or so.
Kudos to the wise posters above. The Roth is one of the best deals going for us small investors.
Two thoughts:
It makes sense that folks overall are investing more aggressively in these, as they haven't been around all that long and therefore have a higher percentage of younger investors (who should be investing aggressively). Their exemption from RMD requirements also makes them attractive for long-term oriented investors who can afford to be more aggressive.
Roths can be used in a variety of ways. View them as a tool. I'm somewhat agnostic on whether they make sense for younger investors who are dollar-averaging into their plans. But I'm very much in favor of converting at older ages if you can afford to pay Uncle Sam without selling shares and if you believe you're buying into an over-sold market area. Play the bounce.
We did three later-life conversions and now have over 60% in Roths. I find in looking at them that we've tended to load them up with our favorite fund houses & funds - those having low fees and steady proven long term growth records. We're not necessarily more aggressive with them, but we are decidedly more selective in the investments they contain - and also take more of a "hands off" approach.
Comments
Regards,
Ted
Two thoughts:
It makes sense that folks overall are investing more aggressively in these, as they haven't been around all that long and therefore have a higher percentage of younger investors (who should be investing aggressively). Their exemption from RMD requirements also makes them attractive for long-term oriented investors who can afford to be more aggressive.
Roths can be used in a variety of ways. View them as a tool. I'm somewhat agnostic on whether they make sense for younger investors who are dollar-averaging into their plans. But I'm very much in favor of converting at older ages if you can afford to pay Uncle Sam without selling shares and if you believe you're buying into an over-sold market area. Play the bounce.
We did three later-life conversions and now have over 60% in Roths. I find in looking at them that we've tended to load them up with our favorite fund houses & funds - those having low fees and steady proven long term growth records. We're not necessarily more aggressive with them, but we are decidedly more selective in the investments they contain - and also take more of a "hands off" approach.