devinjameskenzie wrote:I have some really basic questions. By way of background, I intentionally max out my 401(k) each year through my job; however, because of regulations on the 401k plan, I end up being refunded 5-6K from the administrator at the end of the year. My accountant says thats because others at job don't contribute enough and plan fails IRS regulations. So, I have money that I would like to invest ( and also add some other funds too through the year). My Wife and I also have Roth's through Vanguard that we max out each year. I have read the Boglehead books and ( I think) I am ready to open a taxable Vanguard Account. We have no debt and a well funded emergency fund. I want to know how to open a Vanguard taxable account and what is required if you know? Can I use the Account that my Roth's are through or must I open a new and separate account? Also, I understand that I should choose mutual funds with low/qualified dividends, low turn over(such as tax efficient index funds and/or tax managed funds.) The book suggests Vanguard Total Stock Market Index Fund and Tax managed International Funds. Are these still the best funds or would you suggest another fund(s)? Also, which is better the TSM index fund or the tax managed fund, or should I open both funds in the taxable account? Finally, my wife works a pt job and only makes about 1-2k per year, can she open a taxable account too? Please help! Thanks
The book suggests Vanguard Total Stock Market Index Fund and Tax managed International Funds. Are these still the best funds or would you suggest another fund(s)? Also, which is better the TSM index fund or the tax managed fund, or should I open both funds in the taxable account? Finally, my wife works a pt job and only makes about 1-2k per year, can she open a taxable account too? Please help!
devinjameskenzie wrote:What about distribution issue/ tax consequences as stated in my earlier post?
devinjameskenzie wrote:I think I have decided to pull the trigger on the taxable account and use the Total Stock Market Index Fund AND Total International Stock Index Fund. The only question I have is after the account is opened how do I go about making sure my desired allocation into the taxable account is accomplished? For example, say I want to put 30% into international fund and 70% into TSM fund? Also, does anyone know of the distribution date for either of these funds?
devinjameskenzie wrote:I read that it is best to not have your dividends from your taxable account automatically reinvested, but rather have placed into your bank account. Why is this? And, can it be any bank account or is it preferable to have a MMA Fund set up in the taxable account in addition to the other index funds?
devinjameskenzie wrote:Do you know whether you can allocate your new monies in percentages into each fund in the Vanguard Taxable Account or must it be separate checks for each account?
folks had to keep track of the cost basis of their shares in their heads or perhaps on a rock with chalk. So if one re-invested dividends that meant they bought more shares and had to find a piece of chalk to record that information.
livesoft wrote:Nowadays, with the better education system that we have and with new tools like annual statements, computers, spreadsheets, and so on, one doesn't have to remember what their cost basis is and they don't have to use chalk to keep track of these things. Someone or something else will calculate the cost basis for them.
devinjameskenzie wrote:Since I am unclear: If I open a VG taxable account with Total Stock Market and Total International Stock Market Index Funds, is it better to reinvest dividends or put into a separate account? Thoughts.
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