Resources to learn more about taxable mutual fund accounts?

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ladybug810
Posts: 11
Joined: Wed Feb 15, 2012 7:13 pm

Resources to learn more about taxable mutual fund accounts?

Post by ladybug810 »

Hi all,

I am interested in opening a taxable mutual fund account with Vanguard and am looking for some resources to learn more about taxable accounts. I've read Bogleheads Guide to Investing, and plan to reread that section of the book. Can anyone recommend other resources?

This account is for mid- to long-term savings. We're maxing out our retirement accounts, our home is paid for, our daughter's college education is saved for, and we have a six-month emergency fund. Now we need a place to save extra income until we have a large expense. On average, we'll likely add $2-6k/month to this account (my husband's income is highly variable). Examples of furture purchases could be new carpet or a new furnace within the next 5 years, possibly wedding expenses for our daughter someday (she's 19), an eventual replacement car 5-6 years from now, or perhaps a vacation home or rental 10+ years from now. We know some of these expenses are coming, but not necessarily when. So while I normally wouldn't invest money for a new furnace if I knew I'd need it in a year, I just don't know when some of these expenses will happen and I'd hate to keep this money in a traditional savings account at our bank.

Since we've never owned a taxable account, I'd especially like to know more about the tax implications of withdrawing from this account. Also, I need help deciding how to invest it. Because this account is for goals without a specific timeline, and I'm not used to having to account for taxes, I'm not sure I can even answer what my risk tolerance is. Even if I decided on my risk tolerance, I'm not sure if I should use the same type of fund allocation I use in my retirement accounts. Any advice is welcome!

Kristen
livesoft
Posts: 85971
Joined: Thu Mar 01, 2007 7:00 pm

Re: Resources to learn more about taxable mutual fund accoun

Post by livesoft »

Here is a good free booklet on the tax implications:

http://www.irs.gov/pub/irs-pdf/p550.pdf

It is really short, too, and an easy read.
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