Is this any different than HYSA though?
If a bank has major liquidity issues, even FDIC funds won't be available immediately right?
I'll have to think through this a bit more.aristotelian wrote:That is just mental accounting in your mind. Aside from emergency fund cash that you need to have liquid, there is no need to hold bonds in taxable and doing so costs you more in taxes.enderland wrote: Hmm. I guess this is true.
In my mind, they are "separate" because they have distinct goals as well as timeframes. For example, retirement vs "next 20 years" (though I would like those to be the same and early retire). Which leads me to seeing them as separate components to our portfolio.
Hmm. I guess this is true.KlangFool wrote:
enderland,
<< The main upside of bonds in taxable I suppose is reducing risk in the account vs Total Stock Market.
>>
Not true. You have only one portfolio. Whether you take the risk in your taxable account or Roth IRA or 401K, you are still taking the risk.
Your overall risk is your overall AA. Just because you move money around, it does not change that.
KlangFool
Our retirement portfolio is closer to 90/10 stock/bonds. The 60/40 split is traditional/roth.KlangFool wrote:OP,
You have only one portfolio: 60/40. So, why do you need to treat this investment at your taxable account any differently? It is part of your 60/40 portfolio. It is a lot more tax efficient that way. So, from tax efficiency standpoint, you buy stock index fund at your taxable account.
Where is the problem on keeping thing simple and doing this?
KlangFool
I think that's the golden bullet against doing this for me...SteelCityMD wrote:Yes this assumes no other (better) credit is available. Can't use the same dollars for both.
Note that you can contribute $18k in addition to the $3k employer match.$18,000 his 401k (employer contributes $3000 of this)
Maybe I'll delete and re-add that W2.livesoft wrote:I don't have TT on this computer, so I cannot simply run it with a W-2 with no FICA witheld. However, I do recall that when one enters a W-2, TT asks lots of questions about it. Did you answer the questions?
Boxes 3 and 5 of the W-2 should have no entry if SS and Medicare are not supposed to be taken out.
Hm. Is this just through the process to create an individual general savings account with VTSAX?livesoft wrote:I would suggest a mutual fund account instead of a brokerage account at Vanguard. And instead of the S&P500 index fund, I would suggest the Vanguard Total Stock Market index fund VTSAX. And yes, it is just like opening the Roth account.