How should I distribute investment types between differently-taxed accounts?

Question

Background: I'm 37 and work in the U.S. I have a gross income ~100k, a 401k funded to the legal limit, a Roth IRA funded to the legal limit, and a regular investment account. The 401k has most of the money; the other two are more recent.

I'm rebalancing my portfolio. This is the first time I've done so across multiple account types, which is the impetus for this question.

My intended asset allocation is something like: 25% large-cap stock, 25% small-cap stock, 25% international stock, 25% cash and bonds; of the latter, six months expenses is cash (in an online high-yield savings account), the rest bonds. Optionally, 5-10% in REITs, dividend-focused stocks, or something similar (I'm unsure which category these should count as; I might ask in a separate question). All investments are index funds when possible.

My three investment accounts have different tax structures, so:

1. How should I distribute the different types of investments among the accounts, given their different tax treatment?
2. Is the difference significant enough to be worth working it out, as opposed to just mimicking the total allocation percentages in each account?

Answer 1

I treat all accounts -- taxable, 401(k), Rollover IRA & Roth IRA -- targeted for a single purpose as a single unit. Thus, in your shoes, I would KISS and not divide each account in quarters.

Specifically, the "... six months expenses is cash" would go in an online savings account, so your other accounts would have to be more heavily weighted towards equities and bonds.

Also, dividend-heavy funds should go more in tax deferred accounts (so that you don't have to pay taxes on the reinvested dividends every year). This means that your taxable accounts will lean more towards stocks which rely on capital appreciation.