3 found lazy portfolio - where to put bonds

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broku
Posts: 16
Joined: Sun Feb 12, 2017 10:18 pm
Location: IL

3 found lazy portfolio - where to put bonds

Post by broku » Fri May 12, 2017 10:14 am

Hello there.

I have a 3 fund portfolio. I am 40 old and like the idea of click and forget and low ER of these index funds.
I am also contributing about 5k/monthly to these investments.
35% (215k) US domestic stocks FSTVX
35% (215k)World stocks FSGDX
30% bonds fund (not yet purchased)

Now I am at the point where I need/should decide how to allocate 30% (~200k) bonds. It is currently in saving account, 1.05%.
Since bonds are least tax efficient, they should be placed in tax efficient account (401k, IRA).
I have those, but my dilemma is I can only allocate about 25k/year. Plus, I can sell current holding in 401k and IRA. If I do all that, it will take me multiple years to place bonds in tax efficient accounts.
What should I do in meantime with the cash?
Also, given my age I don't necessarily need the income bonds would provide. Any way I can avoid any income tax?

Thank you.

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goodenyou
Posts: 1164
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: 3 found lazy portfolio - where to put bonds

Post by goodenyou » Fri May 12, 2017 10:17 am

Buy a tax-exempt bond fund in a taxable account.
"Ignorance more frequently begets confidence than does knowledge" | "The best years you have left are the ones you have right now"

Elbowman
Posts: 463
Joined: Tue Apr 03, 2012 2:25 pm

Re: 3 found lazy portfolio - where to put bonds

Post by Elbowman » Fri May 12, 2017 10:24 am

Vanguard Intermediate-Term Tax-Exempt Fund Admiral Shares is a common choice for taxable bonds.

*EDIT* It looks like you are at Fidelity. Presumably they have something similar.

broku
Posts: 16
Joined: Sun Feb 12, 2017 10:18 pm
Location: IL

Re: 3 found lazy portfolio - where to put bonds

Post by broku » Fri May 12, 2017 10:29 am

Hm, tax exempt bond fund. Interesting, will look into it.
Will see what makes more sense exempt vs. non.

mhalley
Posts: 5599
Joined: Tue Nov 20, 2007 6:02 am

Re: 3 found lazy portfolio - where to put bonds

Post by mhalley » Fri May 12, 2017 2:37 pm

Whether you need a muni fund depends on your federal and state tax rate, and if there is a state muni fund for your state. Check out this vanguard calculator.

https://personal.vanguard.com/us/funds/ ... alentyield
Fidelity muni funds
https://www.fidelity.com/fund-screener/ ... 0C00001YR0

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