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I'm surprised at the number of members with little or no tax free investments. Have municipal bond funds become undesirable lately?
I'm into tax free muni bonds, especially since you don't have to pay the 3.8% Obamacare tax on muni bonds. I've converted to a Roth but still have to pay dividend and State taxes on dividends. I'm lucky that I still have a substantial income that makes muni bonds make sense for me. Over all about 75% of my income is tax free or dividend taxed. I just hope they leave muni bonds alone in the future.
All of the tax free is in munis. My tax bracket will be much lower in 2014 and forward, so I plan to start converting some of the tax deferred into Roths as well as re-evaluating if munis still appropriate investment with lower bracket.
When did I ever find the time to work for a living???
Varied over the path of my career/life. More than 10 years from retirement I was consistently a bit stronger in taxable than tax deferred and was near 100% in equities. Typically around 60/40 taxable/tax-deferred. As I've neared retirement I've treated the taxable portion as near(er) term money and changed the AA in this component of my savings. As a result my taxable accounts are now (1-2 years from retirement) something like 35/65 equities/fixed income while my tax deferred accounts are still 80% equities.
Given the run up in equities over the last 4 years the balance has reversed a bit and I'm now about 48% taxable and 52% tax deferred. (and there's about 0.4% tax free from one year when my income was low enough to permit starting a Roth, but that hardly counts. Hope to do some major conversions from t-IRA to Roth after retirement).
If I had worked beyond the age of 45, a greater percentage would have been in the IRA's.
Contentedly ER, with 3 furry friends (now, sadly, 1).
Planning my escape to the wide open spaces in my campervan (with my remaining kitty, of course!)
On a mission to become the world's second most boring man.
The cost basis of that taxable is important. $1M in taxable with a $1M cost basis is a whole lot different than $1M with a $500K costs basis (I realize this can't all be captured easily in a simple post question - just throwing it out there for thoughts).
It wouldn't be a whole lot different if you take the gains in the 0% tax bracket & if not that, spend other assets & keep these gains till death. That basis steps up for your heirs - at the amounts you're talking - & no tax.
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