What are the most suitable assets types to own within a Roth IRA vs. a taxable account?

Generally, Roth IRAs are best suited for assets that a) generate a high return over a long holding period and b) are taxed at a comparably high rate. I'm looking for a list of specific assets, and this is what I've come up so far:

Most Suitable:

  • Domestic REITs
  • Domestic stocks with high dividend yield (if the tax-favored status of qualified dividends disappears)

Not Suitable:

  • Treasuries/municipal bonds
  • Foreign REITs
  • Foreign dividend-paying stocks

Any other asset types I should add?


You're on the right track to answering your own question.

I guess you might add collectibles to the Roth if you can because gains on those are typically taxed at a higher rate.

Just remember that the rules on Roths can change at any time. The rules now might be quite different from the rules when you want to withdraw.

  • 3
    According to irs.gov/publications/p590/…, buying collectibles may be considered a Prohibited Transaction, which results in the Roth IRA being liquidated and a 10% penalty assessed; there are limited exceptions for certain types of coins and bullion Jul 5 '11 at 10:47

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.