Lump Sum in Taxable account

[eboats]

I have $250k available to invest in index funds in my taxable account to support retirement ( 5-10 year time horizon ). I have $530k in my IRA. Overall I'd like to maintain a 60/40 asset allocation across both accounts.

Am thinking of putting the $250k in VTSAX and VTIAX and weighting more towards bonds in my IRA to maintain the overall 60/40. Another alternative would be to add VTEAX or VWITX to my taxable account so that each account has a 60 /40. I'm in the 24% tax bracket. Is there any advantage to putting tax exempt bond funds in my taxable, or should I just leave all the bond funds ( VBTLX, VTABX ) in my IRA?

 

[oldtimer]

Since your IRA is twice the size of your taxable, put all your bonds in the IRA. There will be enough equities in IRA to allow rebalancing of your total portfolio using just your IRA. Keep it simple.

 

[copyright1997reloaded]

I have $250k available to invest in index funds in my taxable account to support retirement ( 5-10 year time horizon ). I have $530k in my IRA. Overall I'd like to maintain a 60/40 asset allocation across both accounts.

Am thinking of putting the $250k in VTSAX and VTIAX and weighting more towards bonds in my IRA to maintain the overall 60/40. Another alternative would be to add VTEAX or VWITX to my taxable account so that each account has a 60 /40. I'm in the 24% tax bracket. Is there any advantage to putting tax exempt bond funds in my taxable, or should I just leave all the bond funds ( VBTLX, VTABX ) in my IRA?

Tax exempt bond funds should not be in a tax-deferred account (I realize this isn't what you asked, just stating this to be clear if someone else reads this).

Since your IRA has more $, I wouldn't worry about tax-exempt in the taxable, just keep the bond allocation in the tax-deferred.

My goal with taxable accounts (which might not be everyone's goal) is that if I am going to have individual equities (which I am), that is the first place for them. Why? Because then I can control when I take capital gains and can also put mostly things whose dividends are qualified.

 

[Souschef]

It is a bad idea to put tax exempt bonds in an IRA, as the income becomes taxable when it is withdrawn.

 

[mrfeh]

Since your IRA is twice the size of your taxable, put all your bonds in the IRA. There will be enough equities in IRA to allow rebalancing of your total portfolio using just your IRA. Keep it simple.

+1

For tax efficiency, you want equities in your taxable account(s).