I’m 28M and currently maxing out my Traditional 401k and fully utilizing my company's Mega Backdoor Roth (MBDR) (so $72,000 a year).
I’m looking to optimize my asset location. Right now, I’m basically mirroring my allocation in both (mostly total market/S&P 500), but I’m considering if I should be more intentional about which assets sit in which tax bucket.
The Question: For those with significant balances in both Traditional and Roth, how do you split your holdings?
Roth priority: Do you put your highest-growth/highest-risk assets here (e.g., Small Cap Value, Emerging Markets) to maximize tax-free growth?
Traditional priority: Do you keep the "steadier" stuff here (e.g., S&P 500, Bonds) to mitigate the future tax bill?
Or do you just keep the same allocation across all accounts for simplicity?
My current thoughts: I'm leaning toward putting my Small Cap tilt in the Roth side and keeping the core S&P 500 in Traditional. I have a 30+ year horizon, so I want to be aggressive, but I’m curious if I'm overthinking the "tax drag" vs. the simplicity of mirroring.
What’s your strategy and why?