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Help with asset allocation in taxable account

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  • adventure
    replied







    Hi there, I am in a similar situation.

    Young attending, no kids/spouse yet, maxed out employer 401K and backdoor Roth. No HSA available. I have a 30 yr mortgage on a rental property with a pretty low interest rate around 3.3% (200k of 550K payed off). I am renting an apartment myself. I do plan to start a family in the next 5 years and to put a down payment on a house. I have about 100K sitting in the bank right now and I’m making 300K a year.

    I would like to start investing in a taxable account. I have all of my accounts at Fidelity (backdoor ROTH account, independent 401K from 1 yr of locums, prior accounts from residency and prior job). For organizational purposes would prefer to open the taxable account at Fidelity if the costs are similar to Vanguard. Any suggestions? Thanks.
    Click to expand…


    Fidelity has the exact same funds.
    Click to expand...


    But higher trading fees?

    Leave a comment:


  • Peds
    replied










    I personally do 70/30 but I also have had some Apple shares for a while mixed in with that. And yes, auto reinvest.
    Click to expand…


    I wouldn’t auto invest dividends.
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    Why not?
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    what nachos31 said.

    Leave a comment:


  • nachos31
    replied
    Auto investing dividends can make it tricky to successfully tax lost harvest. Doing so may accidentally trigger a wash sale if the dividend reinvests during the 30 day period before/after you sell a fund since the reinvestment counts as a purchase of that fund. If you do not plan on tax loss harvesting, then not a big concern.

    Leave a comment:


  • Dreamgiver
    replied







    I personally do 70/30 but I also have had some Apple shares for a while mixed in with that. And yes, auto reinvest.
    Click to expand…


    I wouldn’t auto invest dividends.
    Click to expand...


    Why not?

    Leave a comment:


  • Peds
    replied




    Hi there, I am in a similar situation.

    Young attending, no kids/spouse yet, maxed out employer 401K and backdoor Roth. No HSA available. I have a 30 yr mortgage on a rental property with a pretty low interest rate around 3.3% (200k of 550K payed off). I am renting an apartment myself. I do plan to start a family in the next 5 years and to put a down payment on a house. I have about 100K sitting in the bank right now and I’m making 300K a year.

    I would like to start investing in a taxable account. I have all of my accounts at Fidelity (backdoor ROTH account, independent 401K from 1 yr of locums, prior accounts from residency and prior job). For organizational purposes would prefer to open the taxable account at Fidelity if the costs are similar to Vanguard. Any suggestions? Thanks.
    Click to expand...


    Fidelity has the exact same funds.

    Leave a comment:


  • Peds
    replied




    I personally do 70/30 but I also have had some Apple shares for a while mixed in with that. And yes, auto reinvest.
    Click to expand...


    I wouldn't auto invest dividends.

    Leave a comment:


  • kuma1212
    replied
    You may also find this interesting and helpful (as I did) regarding bonds in a taxable account.

     

    https://www.whitecoatinvestor.com/asset-location-bonds-go-in-taxable/

     

    Leave a comment:


  • Phoenixdown99
    replied
    Hi there, I am in a similar situation.

    Young attending, no kids/spouse yet, maxed out employer 401K and backdoor Roth. No HSA available. I have a 30 yr mortgage on a rental property with a pretty low interest rate around 3.3% (200k of 550K payed off). I am renting an apartment myself. I do plan to start a family in the next 5 years and to put a down payment on a house. I have about 100K sitting in the bank right now and I'm making 300K a year.

    I would like to start investing in a taxable account. I have all of my accounts at Fidelity (backdoor ROTH account, independent 401K from 1 yr of locums, prior accounts from residency and prior job). For organizational purposes would prefer to open the taxable account at Fidelity if the costs are similar to Vanguard. Any suggestions? Thanks.

    Leave a comment:


  • hightower
    replied




    thank you. would vanguard Total stock market index considered a tax efficient fund or would I need to consider some of the tax managed funds like VTMFX
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    Yes, Vanguard total stock market is a great fund for a taxable account.  Very little tax drag with that fund.

    Leave a comment:


  • Dreamgiver
    replied
    I personally do 70/30 but I also have had some Apple shares for a while mixed in with that. And yes, auto reinvest.

    Leave a comment:


  • baulahaMD
    replied
    that is where I was leaning towards too. when it comes to International vs domestic, what are u leaning towards ( 80 domestic/20 international or 70/30). Also is automatic reinvesting a good strategy?

    Leave a comment:


  • Dreamgiver
    replied
    FYI, after some research, the 2 main funds in my taxable account are VTSAX and VTIAX, both very tax efficient and VTIAX will allow you to take advantage of foreign tax credit.

    Leave a comment:


  • baulahaMD
    replied
    thank you. would vanguard Total stock market index considered a tax efficient fund or would I need to consider some of the tax managed funds like VTMFX

    Leave a comment:


  • Faithful Steward
    replied
    Based upon what you've described as your risk tolerance and the time horizon for retirement, I would recommend you choose tax-efficient equity mutual funds or ETFs. After all, it's not how much you earn; it's how much you have left after taxes that really matters.

     

    Leave a comment:


  • baulahaMD
    started a topic Help with asset allocation in taxable account

    Help with asset allocation in taxable account

    Currently, contributing maximum to tax deferred retirement accounts 403b and 457b. No HSA available. Did do the backdoor Roth IRA. All the tax deferred accounts are invested in target retirement funds. Expect to work for another 25 years. So would like to be aggressive. I am looking to start investing in a taxable account at Vanguard. Would like to keep an aggressive profile at least for the next 10 years. Any suggestions?
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