Dreaming of Freedom
Recycles dryer sheets
- Joined
- Jan 14, 2015
- Messages
- 206
My boyfriend and I took over his retirement accounts from his financial advisor a few weeks ago, and have already made a few changes here and there. I am hoping we made the "correct" changes to his taxable brokerage account to make it more tax efficient.
1) We sold an intermediate bond fund at a loss, and also sold a managed large cap fund at a gain. The two sales almost zero out the long term capital gains, but my boyfriend should be able to stay in the 15% tax bracket, so hopefully he will pay 0% on the long term capital gains if we estimated all his income correctly. The bond fund threw off a lot of ordinary, taxable dividends, so it had to go.
2) I ended up buying the Schwab Large Cap Index ETF (SCHX) hoping that it will be fairly tax efficient. I am a little miffed that Schwab does not publish a document that shows the percentages of Qualified dividends for all of Schwab's funds and ETF's like Vanguard does (for the previous tax year). Since his account is with Schwab, I did not want to pay $9 to buy a Vanguard ETF (and then $9 to sell it).
3) Does anyone know of a way to research each fund to find out what percentage of its dividends are qualified for the previous tax year?
4) Large cap and S&P 500 index ETF's are usually the most tax efficient investments one can own in a taxable account, right? Is there anything else I should look at? Are there any decent tax-exempt bond funds that I should look at?
5) Are S&P 500 Index ETFs and Large Cap Index ETF's different enough to avoid Wash Sale rules? Are Large Cap Value index ETFs vs. Large Cap Growth Index ETF's different enough? We both regularly buy S&P 500 Index funds in our 401K/457 accounts, and the plan is to buy Large Cap Index ETF's in the taxable account in order to try to avoid wash rules when we harvest capital losses. How do other people deal with this across their different retirement accounts, especially if they are still dollar cost averaging into 401K's?
Note: The boyfriend will not have to rely solely on his taxable account in retirement as he will only have maybe 12-18 months in retirement before he can tap his IRA and 401K penalty free. We are not too concerned with diversifying the asset allocation of each retirement account individually; the overall AA is what is important to us. Most or all of the rebalancing will take place in his large IRA fund.
1) We sold an intermediate bond fund at a loss, and also sold a managed large cap fund at a gain. The two sales almost zero out the long term capital gains, but my boyfriend should be able to stay in the 15% tax bracket, so hopefully he will pay 0% on the long term capital gains if we estimated all his income correctly. The bond fund threw off a lot of ordinary, taxable dividends, so it had to go.
2) I ended up buying the Schwab Large Cap Index ETF (SCHX) hoping that it will be fairly tax efficient. I am a little miffed that Schwab does not publish a document that shows the percentages of Qualified dividends for all of Schwab's funds and ETF's like Vanguard does (for the previous tax year). Since his account is with Schwab, I did not want to pay $9 to buy a Vanguard ETF (and then $9 to sell it).
3) Does anyone know of a way to research each fund to find out what percentage of its dividends are qualified for the previous tax year?
4) Large cap and S&P 500 index ETF's are usually the most tax efficient investments one can own in a taxable account, right? Is there anything else I should look at? Are there any decent tax-exempt bond funds that I should look at?
5) Are S&P 500 Index ETFs and Large Cap Index ETF's different enough to avoid Wash Sale rules? Are Large Cap Value index ETFs vs. Large Cap Growth Index ETF's different enough? We both regularly buy S&P 500 Index funds in our 401K/457 accounts, and the plan is to buy Large Cap Index ETF's in the taxable account in order to try to avoid wash rules when we harvest capital losses. How do other people deal with this across their different retirement accounts, especially if they are still dollar cost averaging into 401K's?
Note: The boyfriend will not have to rely solely on his taxable account in retirement as he will only have maybe 12-18 months in retirement before he can tap his IRA and 401K penalty free. We are not too concerned with diversifying the asset allocation of each retirement account individually; the overall AA is what is important to us. Most or all of the rebalancing will take place in his large IRA fund.