Hi folks, I have read and understand the guidance (like boglehead wiki) on full-portfolio asset allocation where dividend and other income generating investments should be kept in tax advantaged accounts. Similarly, equity/stock investments can be in the tax disadvantaged accounts because their gains can be taxed lower via long term capital gains.
What I don't understand is, if I want to retire/FI well before 59.5 and thus can't touch my 401k assets (and make too much to contrib to Roth IRA), shouldn't my taxable Vanguard account have its own independent asset allocation? If I follow the full portfolio allocation with tax advantaged awareness, my fledgling Vanguard acct will be full stock fund(s) and nothing to act as the safe bond-type anchor to balance the risk. If I do add a bond fund, i am thinking one of the Vanguard muni-bond funds. Am I thinking about this correctly? Are there other conservative fund types to consider for this type of account?
I posed this question to Rick & Tom (?) on the radio show Talking Real Money today and they gave me the full-portfolio allocation answer and moved on. Hoping you folks can give some additional input on this. For background, my spouse and I both work for a megacorp that has 401ks with matching, max them to the annual limit, max our HSAs for investing, and have 529s for the kids that look on track. We're aggressively adding taxable investments b/c as far as I can tell all that loot we have in our 401ks is basically off limits till 59.5 without penalties. Please correct me if this isn't true.
Thanks for your input!
What I don't understand is, if I want to retire/FI well before 59.5 and thus can't touch my 401k assets (and make too much to contrib to Roth IRA), shouldn't my taxable Vanguard account have its own independent asset allocation? If I follow the full portfolio allocation with tax advantaged awareness, my fledgling Vanguard acct will be full stock fund(s) and nothing to act as the safe bond-type anchor to balance the risk. If I do add a bond fund, i am thinking one of the Vanguard muni-bond funds. Am I thinking about this correctly? Are there other conservative fund types to consider for this type of account?
I posed this question to Rick & Tom (?) on the radio show Talking Real Money today and they gave me the full-portfolio allocation answer and moved on. Hoping you folks can give some additional input on this. For background, my spouse and I both work for a megacorp that has 401ks with matching, max them to the annual limit, max our HSAs for investing, and have 529s for the kids that look on track. We're aggressively adding taxable investments b/c as far as I can tell all that loot we have in our 401ks is basically off limits till 59.5 without penalties. Please correct me if this isn't true.
Thanks for your input!