Fidelity taxable account recommendations

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Eli79
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Joined: Fri Jan 09, 2015 7:40 pm

Fidelity taxable account recommendations

Post by Eli79 » Mon Jan 22, 2018 11:31 pm

Maxed out tax deferred accounts.
Strategy to transfer 80k from an online savings (1.4%)
Into a fidelity taxable account.
AA target for taxable is 80:20 or 70:30 (still thinking about it).

1) Looking for help in choosing a highly tax efficient fund for the stock component.

2) Also would you choose the MN (my state) Muni (FIMIX) over fidelity interm. Muni fund (FLTMX) or something similar?

Thanks!

TheDDC
Posts: 134
Joined: Mon Jan 08, 2018 11:11 am

Re: Fidelity taxable account recommendations

Post by TheDDC » Mon Jan 22, 2018 11:33 pm

I, too, am interested in this, except for question 2 I would ask about VPAIX. :confused

ClaycordJCA
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Location: SF Bay Area

Re: Fidelity taxable account recommendations

Post by ClaycordJCA » Mon Jan 22, 2018 11:49 pm

Fidelity index funds aren’t particularly tax efficient. Consider instead a total market index ETF. ITOT trades commission free in a Fidelity brokerage account. Wish I had known this a few years ago when I sold the managed funds and opted for the index. I’m still in a better position than I was, so I am not complaining too much.

I opted to split my after-tax muni bond funds between Fidelity’s Tax Fee Bond Fund and their California Muni Bond Fund. I like both diversifying due to risk and the state tax exemption so I opted for a little of each.

Chip
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Re: Fidelity taxable account recommendations

Post by Chip » Tue Jan 23, 2018 6:01 am

Consider making your taxable portfolio (not including e-fund) 100% stocks. Put enough bonds in your tax-deferred accounts to get your overall desired AA. That will almost certainly be more tax efficient than what you are proposing.

See the wiki article: https://www.bogleheads.org/wiki/Tax-eff ... _placement

blessed
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Re: Fidelity taxable account recommendations

Post by blessed » Tue Jan 23, 2018 12:21 pm

Consider increasing the FI allocation in your tax-deferred and go 100% stocks in your taxable to match your AA.

In our Fidelity taxable account we use ETFs: ITOT (total US) and IXUS (total intl).
Last edited by blessed on Tue Jan 23, 2018 1:55 pm, edited 1 time in total.

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triceratop
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Re: Fidelity taxable account recommendations

Post by triceratop » Tue Jan 23, 2018 12:33 pm

Highly tax-efficient total market index funds available commission-free at Fidelity: ITOT [iShares Core S&P Total U.S. Stock Market ETF], IXUS [iShares Core MSCI Total International Stock ETF]. I would use those.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

Cash
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Re: Fidelity taxable account recommendations

Post by Cash » Tue Jan 23, 2018 9:22 pm

Chip wrote:
Tue Jan 23, 2018 6:01 am
That will almost certainly be more tax efficient than what you are proposing.
It is more tax-efficient for me to do the opposite of what you propose. The correct answer depends on the OP's marginal tax rate.

For munis, I use FTABX, but there is no state fund for my state. If you decide to mix in equities, I agree with ITOT and IXUS for their tax efficiency.

Eli79
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Joined: Fri Jan 09, 2015 7:40 pm

Re: Fidelity taxable account recommendations

Post by Eli79 » Tue Jan 23, 2018 11:58 pm

Fed 24% State (MN) ~8%

ITOT is my leading contender for the equity portion.
Bond portion is still up in the air. Leaning towards FIMIX (fidelity MN index fund)

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