It depends on your marginal tax bracket. See this Capital Gains Calculator. I think most of the brackets are still accurate for 2013. (And when doing your figuring don't forget about any reinvested dividends.)jsbmoney wrote:If I sold my taxable funds, would I then pay capital gains of 20% on the growth since I bought them?
Being a government plan is good and because the old 401k is from a former employer you can roll it over either to an IRA or possibly to your current 457 plan, depending on if they allow it and if the plan has good choices. Yours has a couple (VIFSX & VTSGX) but unless you are near the income limits for Roth IRAs and may need the Backdoor Roth IRA option in the future, rolling the old 401k to the new 457 is probably not a good idea.The new 457 is indeed government and the old 401K is from a former employer.
You aren't allowed to contribute to an employer plan when you're no longer an employee there. You sometimes are allowed to rollover assets into an old plan.My question about whether I could still contribute to the old 401K was simply because of it's higher contribution limit so it could potentially allow me to protect more money.
You have more options in an IRA, more choices and quite often cheaper expense ratios.What are the advantages of rolling an old 401K over to an IRA?
You shouldn't have bonds in a taxable account if you can help it. They kick out too much non-qualified income. Balanced funds have bonds in them so they don't belong in taxable. Although it doesn't hurt (tax-wise) to have them in tax-sheltered, when you try to consider your AA and rebalancing, the math can get a little complicated. You can do it, but it's easier to have individual funds (TSM, TISM, TBM, REIT, etc.) rather than balanced funds which are a basket of individual funds (Target Retirement, LifeStrategy, Wellesley, etc.). Also, the individual funds may be cheaper with admiral shares if your portfolio is big enough and yours is.Can you also explain further why the balanced accounts aren't recommended?
jsbmoney wrote:I'm not certain how to determine the dividends reinvested, but it may be considerable. Is there any easy way to find this information? Wouldn't I already be taxed on dividends in my taxable account?
I assume it would take a number of years to recoup the amount lost to taxes, but would eventually pay off since I'll be paying less in fees?
Yes, the cost basis would be all purchases whether reinvestments or not.jsbmoney wrote:So if Edwards Jones does provide me the cost basis, they would be providing me the total amount paid (initial cost + reinvested dividends) for each fund in my taxable account?
Yes.In your example is the $5115.44 the basis?
Yes. You've already paid the taxes on the dividends. Since you reinvested them they are part of your basis and go on Form 8949 when you sell. However, if you're ever audited you need to be able to prove that the dividends were reinvested and that your numbers are correct. (Even if EJ does provide the basis, you might want to verify their numbers.)If Edward Jones doesn't provide this value, then I have to figure this out from my statements or I'll be taxed twice for it? Am I understanding that correctly?
Most people have them paid into an account which doesn't create a gain or loss when sold. This could be a money market fund or a savings or checking account. In my particular case, my taxable account for retirement purposes is at Vanguard and I only hold TSM and TISM there. The distributions are paid to the Prime Money Market. I normally keep $XX in there as my emergency fund. When the account gets to $5K more than $XX I shift $5K to whichever of the two stock funds is below its AA. I like big round numbers. I find them easier to track. Fewer, larger purchases mean fewer tax lots to track and you can rebalance as you go. When I had less money I rebalanced with $500 or $1000, but still round numbers. But that's just me. Other people do it differently. You'll need to find what works best for you.If it's not recommended to automatically reinvest dividends/capital gains distributions in taxable accounts, what do you do with them?
It's not only ok, it's recommended. There is no tax issue when rebalancing in tax-sheltered accounts.I assume it's ok to reinvest them in tax-deferred accounts?
I don't think you should try to time the market. If you want 40% bonds, have 40% bonds.jsbmoney wrote:I'd like to allocate about 40% of my portfolio to bonds, probably a total bond market index fund, but since the interest rate is so low right now I've read that this may be ill-advised at this time. Should I be allocating a smaller portion of my portfolio to bonds?
Ya think? Yes, sell and move to Vanguard. It's an IRA so there's no tax cost (although they'll ding you with closing fees).Also, for anybody's interest I've looked into my Edward Jones Advisory Solutions account. It seems there is 1.35% annual program fee for an account my size plus a .09% administrative fee on top of the cost of the mutal funds within the account. The funds in my Advisory Solutions account are below. Probably need to move this.
jsbmoney wrote:Should I be looking into alternative bond index funds with different government/corporate allocations? Are there any noted funds that are allocated as such? Thanks.
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