Episode 475: Managing An Inherited Roth IRA, Roth vs. Traditional Tax Locations, Some Basics With Resources, And Portfolio Reviews As Of December 26, 2025

Dec 28, 2025

This discussion dives into the nuances of managing an inherited Roth IRA over a decade. It explores the challenges of asset location between Roth and traditional accounts, focusing on maximizing tax benefits. Insightful comparisons of international investment options like VXUS versus targeted tilts are shared. Listeners learn about effective drawdown strategies to preserve tax-free growth. Portfolio reviews round out the conversation, providing actionable insights into diverse allocation strategies and their market performances.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

ADVICE

Delay Withdrawals From An Inherited Roth

Leave inherited Roth funds invested in the Roth as long as allowed to maximize tax-free growth.
Keep highest-growth assets inside the Roth and delay withdrawals until required or necessary.

ADVICE

Segregate Short-Term Speculation

Treat short-dated options and speculative crypto separately from core allocations.
Segregate speculative positions (or cash them near expiry) rather than folding them into long-term risk parity weights.

ADVICE

Match Allocation To Loan Timeframe

Move brokerage assets into a lower-volatility/risk parity style if you need the collateral stability for a securities-backed loan.
Match the account's allocation to the time horizon of the intended use to reduce margin-call risk.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

In this episode we answer emails from Tyler, Michael and Jon. We discuss managing an inherited Roth across a 10-year window and related questions, compare VXUS to targeted international tilts, tax and asset location considerations for traditional and Roth IRAs, and talk about some of the basic ideas for achieving higher safe withdrawal rates.

And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional Links:

Father McKenna Center Donation Page: Donate - Father McKenna Center

Golden Ratio Portfolio Article: Beautiful Constants and the Golden Ratio Portfolio – Portfolio Charts

Afford Anything Podcast #618: They Ran Out of Money. I Didn’t. Here’s Why.

Slide Deck: Afford Anything Episode 618 RPR Basics Slide Deck.pdf - Google Drive

Video Summary: Afford Anything Episode 618 Video Summary.mp4 - Google Drive

Afford Anything Risk Parity Portfolio Blueprint: Afford Anything frank-vasquez-risk-parity-portfolio-BluePrint.pdf - Google Drive

Bigger Pockets Money Podcast: The Secret to a 5% Safe Withdrawal Rate | Frank Vasquez

Slide Deck: BP Money Interview Slide Deck.pdf - Google Drive

Video Summary: BP Money 5 Pct Withdrawals (F. Vasquez).mp4 - Google Drive

Breathless Unedited AI-Bot Summary:

A surprise inheritance, a strict 10-year clock, and a plan that has to work through whatever the market throws at it—this conversation tackles the decisions that actually move the needle. We break down a practical approach to managing an inherited Roth IRA, why delaying withdrawals can preserve tax-free growth, and how to separate speculation from your core allocation so one risky bet doesn’t hijack your entire plan. Along the way, we show how risk parity portfolios lower sequence-of-returns risk and why the best “edge” is often calm structure, not prediction.

We dig into tax location with real-world transitions in mind. During your working years, most of the portfolio belongs in equities; the puzzle appears when you move toward retirement and spread assets across bonds and diversifiers. That’s where location shines: place ordinary-income-heavy assets in traditional accounts, keep the highest-growth assets in Roth, and avoid turning your taxable account into a tax drag. We also talk about securities-backed lines of credit and why reducing portfolio volatility can materially lower margin stress when you’re funding future purchases like rentals.

If international stocks feel like a copy of your U.S. exposure, they probably are. We explain how currency drives much of the U.S. vs ex-U.S. gap and why targeted tilts—international large cap growth and small cap value—can be a more effective pairing than broad VXUS. Then we tackle illiquid plays and limited partnerships: categorize by the underlying asset, respect rebalancing limits, and treat truly illiquid positions as separate businesses with independent cash flows.

Support the show