If you have a variety of investment accounts
— for instance a 401(k), an IRA, and a separate taxable account
— you’ll want to consider not only how to allocate the
assets within each account, but also how your different accounts
can work together to help you meet your financial goals.
For example, if your 401(k) and IRA are invested
primarily in stocks and stock mutual funds, you may want to seek
balance by allocating a larger percentage of your taxable account
to tax-exempt
municipal
bonds
and
Treasurys.
Or if you’re buying growth stocks for your taxable account,
you might want to emphasize equity income in your 401(k).
Guaranteed income
Another consideration is whether you’ll
be eligible for a guaranteed, fixed-income pension when you retire.
If that’s the case, you may be in a position to assume greater
risk in your own investment portfolios, with the goal of achieving
higher returns. That might mean weighting your asset allocation
more heavily toward stocks, as opposed to
fixed-income
securities.
Your financial adviser can help you assess the overall picture
to find an allocation that’s in line with your goals.
Investing together
If you’re married or have a long-term partner, you may want to think about an overall asset allocation for your combined portfolios.
