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  • #16
    I'm wondering what people think about muni bond funds. I've been buying into the PIMCO california muni bond funds to get state and fed tax exempt dividends. They have really taken a beating price wise. But that means if I buy in now I would be getting 5.4% tax free dividend

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    • #17
      Depends on why you want them. I like muni bonds for taxable, in general.

      Not so sure about this one though. Pretty high ER for a bond fund, especially compared to return. But that's not really why you'd be holding it, hopefully.

      Would suggest looking at more diversified options outside of California-specific, and at lower cost, but you do you.

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      • #18
        Originally posted by RoadtoFIRE View Post
        I'm wondering what people think about muni bond funds. I've been buying into the PIMCO california muni bond funds to get state and fed tax exempt dividends. They have really taken a beating price wise. But that means if I buy in now I would be getting 5.4% tax free dividend
        ??? You wouldn't buy a bond fund because it has "really taken a beating price wise" - you would buy one if it's part of your bond allocation.

        If you want CA-specific, that's fine - but I would add some VTEB as well for diversification - although not really necessary. CA is the 5th largest economy in the world - unlikely to default.

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        • #19
          Originally posted by jz- View Post
          I LOVE your VTI/VTEB asset allocation. I'm retired now, but if I could start anew that'd be my AA.


          Gotta strongly disagree with this , Cord.
          That strategy is a hangover from 80s-90s when interest rates were high; it was tax-efficient to put interest in tax-deferred accounts.
          I advocate each account have it's own AA depending upon goal duration and tax-efficiency.
          Retirement group with a separate taxable for other purposes makes sense. Across all retirement gotta include all accounts and tax efficiency. You don't want to rebalance each retirement account or taxable with every buy/sell having a tax impact.
          Just saying, a little common sense avoids an activity trap. Each account is a mess, materiality etc is another complicating problem. It is to your benefit to use all retirement accounts (including a taxable) in total.

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