Which assets where

Taxes
1

If you had the following assets at retirement:

  • Gold
  • CHF cash
  • US REIT 7% dividend
  • US Growth stock (no dividends)
  • US Tobacco stock (10% dividend, no growth)
  • US Mining stock 6% dividend
  • VT ETF (World ETF)
  • VOO ETF (US ETF)

Which would you put in a vested benefits (tax protected) account and which in a taxable general investment account?

FIRE at 50 - Optimizing liquidity, risks and taxes
2

Ignoring tax progression on lump sum: anything generating income should go in vested benefits account.

Taking into account tax progression, it’s likely more complex and will depend on the time horizon.

3 Likes
3

Will follow because this seems like a good exercise. Seems you should put taxed stuff (like dividend generating shares) in retirement if possible (are individual shares possible here?) and non taxed stuff in post tax, but is there more to it?

(Though I have to wonder whether you’re asking for investment advice or for trouble, with the unnecessarily explicitly named individual stock categories :sweat_smile:)

4

Gold , Cash and no dividend stuff -: definitely out of vested

6%, 7% dividend & 10% dividend -: should be inside Vested. But can you? I don’t think vested have such flexibility

2 Likes
5

When the pension fund is transferred into a VB, there would be a lump sum amount which needs to be allocated (as I wouldn’t want the VB account to hold just cash).

So then, I would do the re-balance and allocation between VB and GIA as an integrated exercise.

Yes, this is a secondary problem. Current portfolio contains single stocks, so if I wanted to ‘move’ these into the VB, then I’d need to replicate/approximate these with the available instruments at VIAC and Finpension.

While, I would love there to be some tool that takes your existing portfolio, your desired portfolio allocation and desired split between VB and GIA and work out how to map that to the available instruments, I think this would be a DIY/manual job.

6

Yes I understood that.
But VB funds are limited and i wonder if funds with such high dividends actually exist inside VB.

7

I guess the closest are the value tilts or maybe the low-vol tilts.

8

Value weighted (CH domiciled pension fund) or global quality dividend (LU domiciled)

Value weighted has a higher dividend yield and strong ex US tilt currently.

Alternatively, build the MSCI world / ACWI ex US inside vested benefits, and VTI/VOO outside.

The pension funds in VB are also available as CHF hedged, is that is something you want to consider.