STC wrote:If you goal is to max out your tax advantaged space, AND you are comfortable with your emergency liquidity position, AND you do not have enough income to do "all of the above," then:
- Max Pre-Tax 401k
- Contribute to post-tax 401k > roll over to tIRA > roll that over to rIRA
Dont eat the capital gains, unless you need a better emergency fund. And set up your asset allocation in the accounts according to your IPS...
and pay about $750 in taxes
Brian2d wrote:Thanks. This is not a question of maxing tax advantaged space. I am happy with my current contributions there.
This is a question of: Are I-bonds preferrable enough over a Vanguard bond fund in my IRA that it is worth it to generate the gains and pay about $750 in taxes, given that I can achieve my desired asset allocation either way.
This option would generate about 3,000 in capital gains, which I figure would lead to about $750 in taxes (15% federal, 10% local-almost all would be LTCG)
Brian2d wrote:Though I would have to pay $750 now, isn't that $750 gains that I would have to pay eventually whenever I sell this stock (perhaps long into the future). I know in general its a good idea to defer taxes for compounding purposes but if I'm correct it's not fully being 750 in the red because my overall basis on my taxable investments will have increased as a result.
It may still be worth it not to realize the gain however and just stay in a bond fund (I'll choose short duration now if I were to choose that).
Brian2d wrote:Thanks BBL. Another option is to not-reinvest distributions and then buy i-bonds with the distribution amounts. There's no reason I couldn't by i-bonds multiple times during the year, right? What's your thought on this?
I have the option to do 1 of the following
1. Invest about 10,000 in Short Term Investment Grade in my Roth IRA.
2. Sell 10,750 in stocks, buy 10,000 worth of ibonds, and take invest the 10,000 in the IRA in Equity funds.
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