What's in your after tax portfolio?

[nun]

I have a MM and Total Stock Market and Total International Stock Market index equity funds. Does it need to be any more complicated?

 

[freebird5825]

By order of magnitude, i.e. highest to lowest...in taxable accounts
VWALX - High Yield TE muni, avg duration 7.5 yrs
VWINX - Wellesley
VTSAX - Total Stock Mkt index
VHDYX - High Dividend Yield index
VEUSX - European index
VWITX - Intermediate TE muni, avg duration 5.8 yrs
VMLTX - Limited TE muni, avg duration 2.4 yrs, DCA active
DODIX - Taxable Bond income, very small stake

In my Roth...highest to lowest...
VGENX - Energy
VBIAX - Balanced index

Complicated? Nah...
Well diversified? Yeah...

Comments are welcome.

 

[nun]

By order of magnitude, i.e. highest to lowest...in taxable accounts
VWALX - High Yield TE muni
VWINX - Wellesley
VTSAX - Total Stock Mkt index
VHDYX - High Dividend Yield index
VEUSX - European index
VWITX - Intermediate TE muni
VMLTX - Limited TE muni
DODIX - Taxable Bond income, very small stake

In my Roth...
VGENX - Energy
VBIAX - Balanced index

Complicated? Nah...
Well diversified? Yeah...

Pssst....what's the rationale for Wellesley? with all it's bonds. I'm still working so income generators aren't a high priority and I have my bond allocation in tax deferred accounts. My tax deferred accounts are twice as much as my after tax accounts and with a 50/50 AA is there any need to have more than a US total stock index, an International stock index and a MM in after tax..... pre or post ER

 

[freebird5825]

Pssst....what's the rationale for Wellesley? with all it's bonds. I'm still working so income generators aren't a high priority and I have my bond allocation in tax deferred accounts. My tax deferred accounts are twice as much as my after tax accounts and with a 50/50 AA is there any need to have more than a US total stock index, an International stock index and a MM in after tax..... pre or post ER

Wellesley is for non-muni bond diversification plus some more equity exposure. I had no choice but to put it in a taxable account because I bought it post-FIRE. I am single with no earned income, so no more Roth contributions are allowed.
Razza frazza..

 

[DblDoc]

I have a MM and Total Stock Market and Total International Stock Market index equity funds. Does it need to be any more complicated?

No.

I have mostly VTI and VEU in my taxable with a little VWO and DLS.

DD

 

[LOL!]

From largest to smallest positions:

Vanguard Small Cap Value Index
Vanguard FTSE all-world ex-US Small Cap Index
Vanguard FTSE all-world ex-US Large Cap Index
Vanguard Large Cap Index
iShares MSCI EAFE Small Cap Index

Since they take out foreign taxes from the foreign funds no matter whether they are in a taxable or tax-advantaged account, I like to have foreign index funds in taxable so that I can claim the Foreign Tax Credit on those foreign taxes that I pay regardless. In essence, the dividends start to look US-tax-free.

Not in my taxable accounts: Bonds, tax-exempt bonds, money markets, CDs, balanced funds.

 

[IBWino]

From highest to lowest:

VFINX - Vanguard 500 Index Fund
VTMSX - Vanguard Tax Managed Small Cap
VTMGX - Vanguard Tax Managed International
VTGIX - Vanguard Tax Managed Growth and Income
VFSTX - Vanguard Short Term Investment Grade
VBIIX - Vanguard Intermediate Term Bond Index
VWITX - Vanguard Intermediate Term Tax Exempt
VCAIX - Vanguard California Intermediate Term Tax Exempt
VGSIX - Vanguard REIT Index
VGPMX - Vanguard Precious Metals and Mining
VMMXX - Vanguard Prime Money Market

I know it's a little bond heavy for a taxable account, but it fits our tolerance for risk.

 

[LOL!]

^ Any tax savings you think you are getting from those tax-managed funds is flying out the door with those REITs and taxable bonds. Many folks would recommend you put those taxable bonds and REITs in a tax-advantaged account if there is room. That is move bonds into tax-advantaged and ome equities in tax-advantaged move into taxable to make room for the fixed income funds. That should not change your asset allocation and your tolerance for risk would be unaffected.

Some folks already have their tax-advantaged filled with bonds and so need to put bonds in taxable.

When I moved my bonds into tax-advantaged a few years ago, I reduced my taxes by tens of thousands of dollars. Not thousands of dollars, but tens of thousands of dollars.

 

[lemming]

DTE individual stock
Janus Worldwide
Janus Research
Janus Income
Fidelity High income bond

I want to take all of this at put about $250k in GNMA at Vanguard and the other in CD ladder for 4 years started two years out. Would that be a really bad idea or just sorta?

 

[freebird5825]

DTE individual stock
Janus Worldwide
Janus Research
Janus Income
Fidelity High income bond

I want to take all of this at put about $250k in GNMA at Vanguard and the other in CD ladder for 4 years started two years out. Would that be a really bad idea or just sorta?

I used to own some Janus funds in my early days of investing (1997-99 time frame). When I learned that I really didn't need to pay front end loads and high expenses, I liquidated them to some VG funds.
I am not in a position to answer the GNMA and CD ladder question. I own neither directly. One of my balanced funds has some GNMA holdings in it.

 

[Brat]

I am considering purchasing Oakmark International outside our IRAs. It seems to be doing better than the globals available without fee through Fidelity. Am I overlooking anything?

 

[nun]

I seem to have the most "couch-potato" after tax portfolio out there, two funds and a MM to hold some emergency cash. KISS...anyone with me..of course KISS is an acronym in this instance.

 

[freebird5825]

Ah...the cut and paste from Yahoo chat DID w*rk.

 

[IBWino]

^ Any tax savings you think you are getting from those tax-managed funds is flying out the door with those REITs and taxable bonds. Many folks would recommend you put those taxable bonds and REITs in a tax-advantaged account if there is room. That is move bonds into tax-advantaged and ome equities in tax-advantaged move into taxable to make room for the fixed income funds. That should not change your asset allocation and your tolerance for risk would be unaffected.

Some folks already have their tax-advantaged filled with bonds and so need to put bonds in taxable.

Understood, thanks for the comment. I'm still learning and just starting to figure some of this out. I only have a single bond fund from which to choose in tax deferred (401k), and it already represents most of our bond allocation. Since VBIIX is only 10% of our taxable account and 3% of our total portfolio, I didn't think it would hurt us too bad. Also, since I don't have access to a REIT in tax deferred, it was added to our taxable account as a diversifier; it is only 5% of our taxable fund and less than 2% of our total portfolio.

When I moved my bonds into tax-advantaged a few years ago, I reduced my taxes by tens of thousands of dollars. Not thousands of dollars, but tens of thousands of dollars.

I would love to be in that position; I'd FIRE immediately. So far, our taxable account has only increased our taxes by about $1K per year.

Hoping to FIRE in five years, and then I will likely rejigger things when I move the 401k assets to an IRA.

Regards,
Wino

 

[youbet]

I used to own some Janus funds in my early days of investing (1997-99 time frame). When I learned that I really didn't need to pay front end loads and high expenses, I liquidated them.......

I didn't think that Janus funds were load funds. I own some JABAX and it's no-load. Where did you own the Janus funds where you paid a load?

 

[Darryl]

Wellesley is for non-muni bond diversification plus some more equity exposure. I had no choice but to put it in a taxable account because I bought it post-FIRE. I am single with no earned income, so no more Roth contributions are allowed.
Razza frazza..

Freebird, not sure of your cost basis on your Wellesley or your Dodge and Cox Income or the size of these accts vs the holdings in your Roth.

Currently you have:
Taxable............ Roth
VWINX Yld 3.61 VGENX Yld 1.30
DODIX Yld 4.82 VBIAX Yld 2.29

You may be able to reduce your annual tax bill by moving the less tax efficient funds to the Roth. Another option depending on if you can find a bond fund you're comfortable with for the Roth you could do more Total market in taxable in lieu of the current balanced fund in Roth and balanced fund (Wellesley) in taxable (just looking at tax efficiency as I am not bad mouthing Wellesley). A couple hurdles for you to consider 1) tax implications of selling your taxable position. 2) If you like the idea of more bonds in Roth (I do) but many argue to have your potential home run hitters in the Roth 3) innumerable items I'm overlooking.

My training and certification are limited to the time I've spent here.

 

[pb4uski]

I have a MM and Total Stock Market and Total International Stock Market index equity funds. Does it need to be any more complicated?

No. In fact, I think your taxable portfolio is too complex. Mine is only Total Stock and Total International.

Actually, instead of MM I have a Discover Bank savings account yielding 1.2% or so.

 

[nun]

No. In fact, I think your taxable portfolio is too complex. Mine is only Total Stock and Total International.

Actually, instead of MM I have a Discover Bank savings account yielding 1.2% or so.

Yes the MM is a bit of a hang over from higher interest times. I keep a couple of months expenses in it and along with a couple of months expenses in my checking account it is my emergency fund. If I was thinking straight I'd move the MM money to a FDIC insured bank saving account, but it's not a large amount and inertia has taken over......I suppose that comes with being a couch potato.

 

[SVHoper]

Just starting to set up my version of Merriman Ultimate Buy and Hold:

VTI US Large Company Index
VB US Small Cap Index
DODFX /VXUS/EFV International Large
VSS Int SC
GWX Int SCV
VWO EM
EWX EM Small Cap Index

[VBR and REIT slices in tax protected]

Also have chunk of stocks as part of the US Large slice: AAPL, DB, ABT, JPM, C, CRM

No doubt it will get simpler as I get smarter.

 

[veremchuka]

I want to take all of this at put about $250k in GNMA at Vanguard and the other in CD ladder for 4 years started two years out. Would that be a really bad idea or just sorta?

after tax portfolio is taxable unless i'm missing something. no that would not be a good idea. bonds, small cap and reits are best held in tax deferred or a roth because they are tax inefficient. equities that don't generate a lot of cap gains such as the vg total stock market index is an example of what to hold in a taxable account.

 

[Linney]

I have a MM and Total Stock Market and Total International Stock Market index equity funds. Does it need to be any more complicated?

No. In fact, I think your taxable portfolio is too complex. Mine is only Total Stock and Total International. Actually, instead of MM I have a Discover Bank savings account yielding 1.2% or so.

Three's a crowd. I try to keep my after-tax portfolio simple too. I have Total Stock Market + Total International + Limited Term Tax Exempt Muni. The rest of my funds (small cap, corporate bond, TIPs, etc) are in tax-deferred portfolio.

Although I'll admit I am now intrigued by freebird's High Yield Tax Exempt Muni. Time to go do some research . . . .

--Linney

 

[DayDreaming]

I have a MM and Total Stock Market and Total International Stock Market index equity funds. Does it need to be any more complicated?

That's exactly what I have.

 

[scrabbler1]

I have about 58% in Fidelity's Focused High Income Fund, a fund which generates about 75% of the dividend income I use to cover my regular expenses. The remaining part is nearly evenly split between Fidelity's Equity-Income II fund and a pair of muni bond funds, one long-term and the other intermediate-term.. Those 3 funds are holdovers from my working days but the munis have quite a bit less now than they did while I was working.

 

[freebird5825]

I didn't think that Janus funds were load funds. I own some JABAX and it's no-load. Where did you own the Janus funds where you paid a load?

Some Janus funds had loads, some did not back in the late 90s. I was so inexperienced I didn't understand the [-]silliness[/-] effect of paying a front load. A beginner's mistake...
I just looked up some Janus funds on M* and several of them are showing loads. Some are tagged as Load Waived.

 

[freebird5825]

Three's a crowd. I try to keep my after-tax portfolio simple too. I have Total Stock Market + Total International + Limited Term Tax Exempt Muni. The rest of my funds (small cap, corporate bond, TIPs, etc) are in tax-deferred portfolio.

Although I'll admit I am now intrigued by freebird's High Yield Tax Exempt Muni. Time to go do some research . . . .

--Linney

I like the diversification of national muni fund vs a single state muni fund.
This fund is rated higher risk due to credit risk of some of its holdings, so be careful. The worst case loss I've ever seen was -10.5% in 4Q08. It quickly recovered.
I have positioned this particular fund to be a backup "income generator" until I can draw my deferred retirement in 4 years. I haven't had to tap into the dividends so far. My stake in VWALX pays approx $400 every 30 days. For me, there's nothing so nice as free TE dividends to keep building up my retirement portfolio.