Q&A: Should You Keep Part of Your Money Outside the U.S.?

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Dec 30, 2025

Dive into a listener's impressive $1.2 million portfolio as they explore efficient asset allocation and Roth IRA contributions. The hosts discuss whether 100% stocks are appropriate, emphasizing personal risk tolerance. Learn about the complexities of rebalancing without tax implications, alongside tactics for achieving portfolio efficiency. They also tackle the pros and cons of holding assets outside the U.S., weighing the risks of offshore accounts against the geopolitical stability of American investments. Tune in for practical advice and insights!

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INSIGHT

Paychecks Act Like Bonds Early On

Young investors often tolerate 100% equities because their paycheck acts like a bond allocation.
Risk tolerance typically declines later in life as portfolio size grows and paychecks end.

ADVICE

Define Goals Before Optimizing Efficiency

Identify your goals first, then choose the efficient frontier point that meets required returns with minimal risk.
Work with a financial planner to translate goals into an asset allocation aligned with your spending timeline.

INSIGHT

Equities Are Powerful — But Volatility Is Real

100% equities can be historically optimal but creates extreme volatility that many people cannot endure.
Start with 100% stocks then reduce risk based on when and how you'll spend the money.

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#676: Ally:How can I optimize my asset allocation and Roth contributions now that I’m over $1 million in assets?

I’m 45, single, never married, with about $1.2 million in assets. Roughly $100,000 is in stocks, which might scare some people.

Here’s my breakdown:

Vanguard brokerage account: VTSAX $132,000, ISCV $5,000, VOO $5,000
Vanguard Rollover IRA: VTSAX $65,000, IVV $25,000, VOO $62,000
Vanguard Roth IRA: VTSAX $228,000, ISCV $6,000
Pre-tax 401(k): Active stock fund $218,000 (0.01% expense ratio), Equity dividend fund $55,000 (0.01% expense ratio)
Russell 1000: $270,000 (0% expense ratio)
HSA: $9,000 in the Russell 1000 and Russell 2000
ESPP: $90,000
Savings account: $12,000

I view my brokerage accounts as savings, where I can sell assets if I need cash, as well as sell my company shares.

My questions: How far am I from the efficient frontier? How efficient is my asset allocation? I’ve mostly been a “VTSAX and chill” type. If I rebalance, what’s the best way to do it without incurring taxes?

Next year, I’ll make more than $150,000, even after contributing $24,500 to my pre-tax 401(k) in 2026. Can I still do a backdoor Roth, given that I already have an IRA balance? I was told it could be complicated. Am I out of luck investing in a Roth next year?

Also, should I roll over my 401(k) into my existing Rollover IRA to gain more investment options, even though the 401(k) fees are very low?

I’ve reached over $1 million in assets, but I’m not confident my first million was invested efficiently. I want to correct it before reaching my next million.

Emma: Can We Split a Dependent’s Tax Status Midyear to Maximize Health Insurance Subsidies?

We’re a family of four with two adults and two children, ages 15 and 21. Our 21-year-old is a full-time university student and is expected to graduate in May 2026. The hope is that she’ll secure a full-time job after graduation.

Our health care broker told us that we could claim her as a dependent for half of the year and then have her claim herself for the second half. According to the broker, this would allow her to stay on our health insurance and help us qualify for a larger premium subsidy.

Is it actually possible to split a dependent’s tax status this way within a single year, or is this a misunderstanding?

Anonymous: Is It Wise to Hold Some Investments Outside the U.S. for Geopolitical Diversification?

I’ve always believed that “this time isn’t different,” but lately I’m feeling uneasy.

I’m increasingly concerned about what seems like a slow erosion of institutional trust in the U.S., especially regarding agencies and structures that support our financial system. From leadership changes at key government institutions to growing political influence over economic policy, I’m starting to wonder if it’s prudent to hold a small portion of assets physically and legally outside the U.S.

I’m not talking about exotic offshore schemes. I mean legitimate ways to invest in broad index funds or ETFs through a brokerage account based abroad—as a form of geopolitical diversification and personal contingency planning. I’d love to hear your perspective.

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