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Academy of Financial Services Annual Meeting 2022

September 27–28, 2022

Virtual Conference via Zoom

Kentucky Windage for Asset Allocation

Wednesday, September 28, 2022 at 11:00 AM–11:55 AM EDT add to calendar

portfolio choice, asset allocation, taxes

Short Description

Tax-deferred accounts require incurring taxes to access the money inside. This tax liability means a dollar is not necessarily a dollar when evaluating the asset allocation. While the concept of after-tax asset allocation is well established, portfolio management software has lagged behind in implementing it. We describe a simple adjustment to the portfolio asset allocation target that hits the desired after-tax risk level.

Lead & Corresponding Author

William W Jennings, PhD CFA CGMA, USAF Academy

Additional Authors

Brian C Payne, University of Nebraska at Omaha