Bulk of "cash" in SWNTX Schwab Tax Free Bond Fund

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Joined: Sat Dec 28, 2013 1:45 pm

Bulk of "cash" in SWNTX Schwab Tax Free Bond Fund

Post by DebiT »

I've done some shifting of money for the last 2 years from our taxable account to our 401K, to truly max it, contributing more than what I have previously budgeted from my earnings, just to save on the taxes, now that we are older with no withdrawal penalty. Age 61, not likely to fully retire until age 70, in good shape with 401K, comfortable but not a lot of excess cash flow until house is paid off in 3 years at age 64. Lots of things change then, with insurance premiums less for us with Medicare at 65 , extra and regular house payment gone at 64, and husband taking SS at FRA of 66.6

The net result of truly maxing is that now the bulk of what I consider "cash" in the taxable account is invested in SWNTX, Schwab's Tax Free Bond fund. Does that seem wise, or should I move that into something with a more completely stable price?

The yield is about 2.43%. It's definitely down for the year by over 1%. I bought into it mostly in 2011, so according to Quicken I might be down about 0.6%, but I don't know if that includes dividends, which I am reinvesting at this point.

While we haven't had emergencies, over the years I have turned to this account for some special optional expenses, and we do have 2 old cars that are eventually going to need replacing. With interest rates going up, I'm guessing we won't want to finance them, so we'd probably buy 2 year old used, pay cash, and pay ourselves back. As I said above, lots more available cash flow in 3 years.

Given all that, what would be wisest place to invest these dollars in a taxable account ?

Thanks in advance, and Happy Thanksgiving to all!
Age 62, life turned upside down 3/2/19, thanking God for what I've learned from this group
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Joined: Sun Jan 08, 2017 12:25 pm

Re: Bulk of "cash" in SWNTX Schwab Tax Free Bond Fund

Post by PFInterest »

assuming your tax bracket is appropriate for munis, i dont see a need to change anything.
VWIUX is the gold standard imo.
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