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Asset Location in Tax-Deferred and Conventional Savings Accounts

  • John B. Shoven
  • Clemens Sialm

The optimal allocation of assets among different asset classes (such as stocks and bonds) has received considerable attention in financial theory and practice. On the other hand, investors have not been given much guidance about which assets should be located in tax-deferred retirement accounts and which in conventional savings accounts. This paper derives optimal asset allocations (which assets to hold) and asset locations (where to hold them) for a risk-averse investor saving for retirement. Locating assets optimally can significantly improve the risk-adjusted performance of retirement savings.

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File URL: http://www.nber.org/papers/w7192.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7192.

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Date of creation: Jun 1999
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Publication status: published as Shoven, John B. and Clemens Sialm. "Asset Location In Tax-Deferred And Conventional Savings Accounts," Journal of Public Economics, 2004, v88(1-2,Jan), 23-38.
Handle: RePEc:nbr:nberwo:7192
Note: AG AP PE
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