Questions about asset allocation in non-retirement account

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nepenthegu
Posts: 3
Joined: Sun Aug 18, 2013 9:03 pm

Questions about asset allocation in non-retirement account

Post by nepenthegu »

Hi, Everyone:
I have 100K sitting in a bank account that needs to be invested in a Fidelity brokerage account (I have maxed out retirement account). Being close to the next tax bracket, the primary concern I have is the tax implication. My questions are:
(1) I am not sure if I should buy bond index in brokerage account. I know it is not tax efficient to buy bond in brokerage account. But I feel the need to have some bond fund to diversify. Are there any alternatives (e.g. tax efficient bond fund)?
(2) For equity funds, I plan to go with a three-fund strategy: 70% in FSTVX, 15% in FSGDX and the remaining 15% in FSRVX. Any comments?

Any suggestions are greatly appreciated!
The Wizard
Posts: 13356
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Questions about asset allocation in non-retirement accou

Post by The Wizard »

Put the bonds in your retirement account; you can be diversified that way.
Do you also have $100K or more in that retirement account?
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anil686
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Joined: Thu May 08, 2014 12:33 pm

Re: Questions about asset allocation in non-retirement accou

Post by anil686 »

What I have done is keep my retirement (i.e. 59.5 yr or later accounts) as if they were not linked to my taxable. The reasons for this (in my situation) is that my taxable far exceeds the retirement account (even after it is maxed out). Thus if I want to touch my taxable, I have to pay capital gains taxes (potentially) on equities if I had no bonds. I typically try for 30% municipal bonds in my taxable - I find I can sell that fairly liquid, but it is still invested. Sure there may be some capital gains, but it is not much (not nearly as much as selling TSM or TISM). JMO.
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TomatoTomahto
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Joined: Mon Apr 11, 2011 1:48 pm

Re: Questions about asset allocation in non-retirement accou

Post by TomatoTomahto »

nepenthegu wrote:Being close to the next tax bracket, the primary concern I have is the tax implication.
Why would going into the next tax bracket bother you? You do understand how marginal rates work, right? If not, read up on it.
I get the FI part but not the RE part of FIRE.
placeholder
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Joined: Tue Aug 06, 2013 12:43 pm

Re: Questions about asset allocation in non-retirement accou

Post by placeholder »

When you do make sure you get the bonus from Fidelity:
https://rewards.fidelity.com/offers/cashrewards
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