target retirement fund in a taxable account

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toot101
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target retirement fund in a taxable account

Post by toot101 »

Is there anything wrong with picking JUST a target retirement fund as my sole allocation in a personal taxable account at Vanguard? I have 50k in extra money that I do not need (I have an emergency fund).

I am married filing jointly.
Our household income in less than 85k a year between me and my wife, I believe we are currently in the 22% tax bracket, with 3.07% state income tax. This money is just extra that we don't currently need and probably never will until retirement.

I have posted other topics and got some suggestions with different funds, but honestly, is there anything wrong with just putting it all in a retirement fund and just leaving it for 10 or 20 years? Even if the target fund isn't technically when I would be retiring? I was looking at the 2050 fund for Vanguard. Wouldn't it just be simpler this way? I have read about tax complication because bonds are involved in some of these funds, but if I am not making a lot of money, then would it even matter?

I'm just not seeing much of a difference between doing this and picking a 3 fund portfolio.



What I currently have in my portfolio and other info are as follows...

Wife and I together make around $85k a year with 40% of our income going into our 401k's, we file our taxes jointly as Married.

No kids. We are both in our mid/late 30's

No debt and house is paid off. (House is around $150,000 currently, we paid $90,000 for it 5 years ago)

$30,000 in emergency cash (1 year and 3 months expenses or major catastrophe) in my bank account:

PGIM BALANCED FUND - PABCX - ER 1.77% Max Sales Charge 1% (I think, I have been told by others it's 5.5%) - $32,000
PGIM INCOME BUILDER - PCCFX - ER 1.7% - Max Sales Charge 1% - $25,000

These are the two funds that I have with Prudential, that I want to move to Vanguard funds in the near future.

Next is my IRA accounts with Prudential:
PGIM JENNISON GLOBAL EQUITY INCOME FUND - SPQAX - ER 1.15% - $17,500
PGIM JENNISON GLOBAL OPPORTUNITIES FUND - PRJAX - ER 1.08% - $9,100

I am going to roll these two accounts into my current 401k with VOYA through my employer in the near future.

VOYA 401K: (These are NOT the actual Vanguard shares, they are sort of a knock-off, I'm not sure what you call it, but the share prices are a fraction of what they cost normally) 40% of my pay with 4% employer match.

Vanguard® 500 Index Fund - Admiral™ Shares - VFIAX - - ER .04% - $8,500
Vanguard® Mid-Cap Index Fund - Admiral™ Shares - VIMAX - ER .05% - $8,200
Vanguard® Small-Cap Index Fund - Admiral™ Shares - VSMAX - ER .05% - $8,200

E-Trade:
about $6,500 in various stocks
Last edited by toot101 on Mon May 03, 2021 11:42 am, edited 2 times in total.
livesoft
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Re: target retirement fund in a taxable account

Post by livesoft »

For some folks who do not like to pay any income taxes that they can easily avoid, then such a fund would be wrong. If you are happy to increase your income taxes for the convenience of using such a fund, then there is nothing wrong with it.

Added: If your household income is $85K or so a year, then you should not be in the 22% income tax bracket. You should probably take some time to understand why this is so.
Last edited by livesoft on Mon May 03, 2021 8:41 am, edited 1 time in total.
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Brianmcg321
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Re: target retirement fund in a taxable account

Post by Brianmcg321 »

The only thing wrong is that TDF are not very tax efficient. If you’re leaving it there 10-20 years I would just use VTSAX or VTI. Those are better in a taxable account.
Last edited by Brianmcg321 on Mon May 03, 2021 10:09 am, edited 1 time in total.
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Re: target retirement fund in a taxable account

Post by KlangFool »

OP,

A) You could do this and pay more taxes.

Or,

B) you could put this money into the total world index fund and adjust the target retirement fund in your tax-advantaged accounts to be more conservative.

Pay more taxes or put more money into your own pocket. The choice is obvious.

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David Jay
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Re: target retirement fund in a taxable account

Post by David Jay »

Do you have any work-related retirement accounts (401K, 457, etc.?)? If so, I would recommend a “stocks only” approach to this account. Stocks only - using ETFs and/or Vanguard stock mutual funds - will be far and away the most tax efficient over the long haul. VTI (US only) or VT (world stock market) would be a good starting point. If you wish to have a fixed-income component in your portfolio one should hold it in your company accounts.

BTW, you are in the 12% federal tax bracket. If married filing jointly the top of the 12% tax bracket is $107,450 $106,150 (when you include the standard deduction).
Last edited by David Jay on Mon May 03, 2021 4:12 pm, edited 2 times in total.
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toot101
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Re: target retirement fund in a taxable account

Post by toot101 »

livesoft wrote: Mon May 03, 2021 8:39 am For some folks who do not like to pay any income taxes that they can easily avoid, then such a fund would be wrong. If you are happy to increase your income taxes for the convenience of using such a fund, then there is nothing wrong with it.

Added: If your household income is $85K or so a year, then you should not be in the 22% income tax bracket. You should probably take some time to understand why this is so.
Honestly, I was just going by this: https://www.kiplinger.com/taxes/tax-bra ... 21-vs-2020
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toot101
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Re: target retirement fund in a taxable account

Post by toot101 »

Brianmcg321 wrote: Mon May 03, 2021 8:40 am The only thing wrong is that TDF are not very tax efficient. If you’re leaving it there 10-20 years I would just use VYSAX or VTI. Those are better in a taxable account.
I was considering ETF's because they are more tax efficient, and was also considering the digital advisor, but I keep reading that if you invest in ETFs, it complicates you taxes more somehow?
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Re: target retirement fund in a taxable account

Post by David Jay »

toot101 wrote: Mon May 03, 2021 8:47 am
livesoft wrote: Mon May 03, 2021 8:39 am For some folks who do not like to pay any income taxes that they can easily avoid, then such a fund would be wrong. If you are happy to increase your income taxes for the convenience of using such a fund, then there is nothing wrong with it.

Added: If your household income is $85K or so a year, then you should not be in the 22% income tax bracket. You should probably take some time to understand why this is so.
Honestly, I was just going by this: https://www.kiplinger.com/taxes/tax-bra ... 21-vs-2020
That chart is correct but the article failed to include the standard deduction of $26,400 $25,100
Last edited by David Jay on Mon May 03, 2021 4:13 pm, edited 2 times in total.
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Re: target retirement fund in a taxable account

Post by David Jay »

toot101 wrote: Mon May 03, 2021 8:49 am
Brianmcg321 wrote: Mon May 03, 2021 8:40 am The only thing wrong is that TDF are not very tax efficient. If you’re leaving it there 10-20 years I would just use VYSAX or VTI. Those are better in a taxable account.
I was considering ETF's because they are more tax efficient, and was also considering the digital advisor, but I keep reading that if you invest in ETFs, it complicates you taxes more somehow?
VTSAX is the mutual fund version of VTI, and Vanguard has a patent that allows Vanguard mutual funds to be as tax efficient as an ETF.

Do not pay for advisor fees for 20-30 years, regardless of how low they may be. Throw it all in VTSAX and call it good.
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toot101
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Re: target retirement fund in a taxable account

Post by toot101 »

David Jay wrote: Mon May 03, 2021 8:47 am Do you have any work-related retirement accounts (401K, 457, etc.?)? If so, I would recommend a “stocks only” approach to this account. Stocks only - using ETFs and/or Vanguard stock mutual funds - will be far and away the most tax efficient over the long haul. VTI (US only) or VT (world stock market) would be a good starting point. If you wish to have a fixed-income component in your portfolio one should hold it in your company accounts.

BTW, you are in the 12% federal tax bracket. If married filing jointly the top of the 12% tax bracket is $107,450 (when you include the standard deduction).
Both me and my wife put 40% of our income to our 401k's. Thanks for the bracket info, I guess the internet lied to me lol. I was consering the digital advisor, but since it only uses ETF's, I was hesitant, because I read that ETF's complicate your taxes somehow.
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Re: target retirement fund in a taxable account

Post by David Jay »

toot101 wrote: Mon May 03, 2021 8:53 am
David Jay wrote: Mon May 03, 2021 8:47 am Do you have any work-related retirement accounts (401K, 457, etc.?)? If so, I would recommend a “stocks only” approach to this account. Stocks only - using ETFs and/or Vanguard stock mutual funds - will be far and away the most tax efficient over the long haul. VTI (US only) or VT (world stock market) would be a good starting point. If you wish to have a fixed-income component in your portfolio one should hold it in your company accounts.

BTW, you are in the 12% federal tax bracket. If married filing jointly the top of the 12% tax bracket is $107,450 (when you include the standard deduction).
Both me and my wife put 40% of our income to our 401k's. Thanks for the bracket info, I guess the internet lied to me lol. I was consering the digital advisor, but since it only uses ETF's, I was hesitant, because I read that ETF's complicate your taxes somehow.
Even more reason to go “stocks only” in your long-term (20+ years) taxable account.
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Re: target retirement fund in a taxable account

Post by livesoft »

toot101 wrote: Mon May 03, 2021 8:53 am Both me and my wife put 40% of our income to our 401k's. Thanks for the bracket info, I guess the internet lied to me lol. I was consering the digital advisor, but since it only uses ETF's, I was hesitant, because I read that ETF's complicate your taxes somehow.
Your link was correct, but it clearly stated "Taxable income" and not all income. We find that much of our income is not taxed. So now it is unclear to me what kind of income your $85,000 mentioned in the original post actually is. It could be before those 401(k) contributions or after. It could be before health insurance deductions or after. It could be before your other deductions or after. Only you can figure this out for yourself.

More than 40% of US families do not pay any federal income taxes and probably will never pay federal income taxes. Your family could be one of them and a target retirement fund is not going to create extra taxes for you at least for many many years.

Maybe you want to put this in Roth IRAs instead of a taxable account, too?
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Re: target retirement fund in a taxable account

Post by retiredjg »

toot101 wrote: Mon May 03, 2021 8:37 am Is there anything wrong with picking JUST a target retirement fund as my sole allocation in a personal taxable account at Vanguard? I have 50k in extra money that I do not need (I have an emergency fund).
With less than $85k income, you are in the 12% tax bracket with a fair amount of headroom. Tax brackets limits are after taking the standard deduction ($25,100 for the two of you). With $85k income minus the deduction, your taxable income is only $59,500 which is in the 12% bracket.

Target date funds are not terribly tax efficient. However, the one you are considering only has about 8% or 9% bonds at this point and your tax bracket is very low. So holding the target fund in taxable now is not much of a problem, especially if it serves your interests.

But...if your income goes up and as the bond percentage goes up, that target fund may not be a great choice in 10 or 20 years. It will become tax-inefficient over time. However, it will also cost you capital gains tax to get rid of it.

You will not have this problem if you use individual funds. You don't have to put all 3 of the 3 fund portfolio into taxable. Just total stock and/or total international will do.
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Re: target retirement fund in a taxable account

Post by toot101 »

David Jay wrote: Mon May 03, 2021 8:52 am
toot101 wrote: Mon May 03, 2021 8:49 am
Brianmcg321 wrote: Mon May 03, 2021 8:40 am The only thing wrong is that TDF are not very tax efficient. If you’re leaving it there 10-20 years I would just use VYSAX or VTI. Those are better in a taxable account.
I was considering ETF's because they are more tax efficient, and was also considering the digital advisor, but I keep reading that if you invest in ETFs, it complicates you taxes more somehow?
VTSAX is the mutual fund version of VTI, and Vanguard has a patent that allows Vanguard mutual funds to be as tax efficient as an ETF.

Do not pay for advisor fees for 20-30 years, regardless of how low they may be. Throw it all in VTSAX and call it good.
Thanks for the clarification. I did read an interesting thread from 2 years ago: viewtopic.php?t=281152 it seems divided that some people think VTWAX would be better than VTSAX because your not just investing in the US. Although there isn't much data to go by since this fund is only 2 years old and I know you can't go by past performance, just curious if anyone else has some of their portfolio invested with VTWAX?
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toot101
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Re: target retirement fund in a taxable account

Post by toot101 »

livesoft wrote: Mon May 03, 2021 8:58 am
toot101 wrote: Mon May 03, 2021 8:53 am Both me and my wife put 40% of our income to our 401k's. Thanks for the bracket info, I guess the internet lied to me lol. I was consering the digital advisor, but since it only uses ETF's, I was hesitant, because I read that ETF's complicate your taxes somehow.
Your link was correct, but it clearly stated "Taxable income" and not all income. We find that much of our income is not taxed. So now it is unclear to me what kind of income your $85,000 mentioned in the original post actually is. It could be before those 401(k) contributions or after. It could be before health insurance deductions or after. It could be before your other deductions or after. Only you can figure this out for yourself.

More than 40% of US families do not pay any federal income taxes and probably will never pay federal income taxes. Your family could be one of them and a target retirement fund is not going to create extra taxes for you at least for many many years.

Maybe you want to put this in Roth IRAs instead of a taxable account, too?
Sorry, I should have realized this! that income is actually our gross before contribution, after contributions it's more like 50kish
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Re: target retirement fund in a taxable account

Post by David Jay »

toot101 wrote: Mon May 03, 2021 9:40 am
David Jay wrote: Mon May 03, 2021 8:52 am
toot101 wrote: Mon May 03, 2021 8:49 am
Brianmcg321 wrote: Mon May 03, 2021 8:40 am The only thing wrong is that TDF are not very tax efficient. If you’re leaving it there 10-20 years I would just use VYSAX or VTI. Those are better in a taxable account.
I was considering ETF's because they are more tax efficient, and was also considering the digital advisor, but I keep reading that if you invest in ETFs, it complicates you taxes more somehow?
VTSAX is the mutual fund version of VTI, and Vanguard has a patent that allows Vanguard mutual funds to be as tax efficient as an ETF.

Do not pay for advisor fees for 20-30 years, regardless of how low they may be. Throw it all in VTSAX and call it good.
Thanks for the clarification. I did read an interesting thread from 2 years ago: viewtopic.php?t=281152 it seems divided that some people think VTWAX would be better than VTSAX because your not just investing in the US. Although there isn't much data to go by since this fund is only 2 years old and I know you can't go by past performance, just curious if anyone else has some of their portfolio invested with VTWAX?
This comes down to your personal preference. Do you want international exposure or not? Some here on BH do, some don’t.
VTSAX = Total US
VTWAX = Total US + Total International

There is no “wrong” choice, both are great, broad market, low cost index funds.
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Re: target retirement fund in a taxable account

Post by David Jay »

livesoft wrote: Mon May 03, 2021 8:58 amMaybe you want to put this in Roth IRAs instead of a taxable account, too?
At your income level you definitely qualify for Roth accounts.

I would put $12,000 ($6000 each) into a pair of Roth accounts for 2020 before May 17 (special deal this year only) and then put $12,000 into the Roths for 2021. Then move $12,000 each year from taxable to the Roths going forward until your taxable balance is gone.

You can withdraw Roth contributions at any time if necessary so there is almost no downside to contributing to the Roth. All growth is tax free - you don’t have to even think about “tax efficiency” inside the Roth accounts.
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Re: target retirement fund in a taxable account

Post by dodecahedron »

David Jay wrote: Mon May 03, 2021 8:50 am
toot101 wrote: Mon May 03, 2021 8:47 am
livesoft wrote: Mon May 03, 2021 8:39 am For some folks who do not like to pay any income taxes that they can easily avoid, then such a fund would be wrong. If you are happy to increase your income taxes for the convenience of using such a fund, then there is nothing wrong with it.

Added: If your household income is $85K or so a year, then you should not be in the 22% income tax bracket. You should probably take some time to understand why this is so.
Honestly, I was just going by this: https://www.kiplinger.com/taxes/tax-bra ... 21-vs-2020
That chart is correct but the article failed to include the standard deduction of $26,400
More precisely, the chart refers to *taxable income* and the article neglects to mention that taxable income can be very much below total income, due to exclusions, above-the-line deductions, and below-the-line deductions (either standard or itemized deductions plus qualified business income deductions).

For a variety of reasons (including various types of tax credits as well as preferred tax rates for LTCG in addition to everything I mentioned above), relying on simple bracket tables of the type in the article can be a very misleading guide to decisions.
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Re: target retirement fund in a taxable account

Post by toot101 »

So I'm thinking of putting 75% into VTSAX and 25% into an international stock fund such as VTIAX or VWIGX. Would that be a good idea? Or just stick with VTSAX?
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Re: target retirement fund in a taxable account

Post by vineviz »

toot101 wrote: Mon May 03, 2021 8:37 am Is there anything wrong with picking JUST a target retirement fund as my sole allocation in a personal taxable account at Vanguard? I have 50k in extra money that I do not need (I have an emergency fund).

I am married filing jointly.
Our household income in less than 85k a year between me and my wife, I believe we are currently in the 22% tax bracket, with 3.07% state income tax. This money is just extra that we don't currently need and probably never will until retirement.

I have posted other topics and got some suggestions with different funds, but honestly, is there anything wrong with just putting it all in a retirement fund and just leaving it for 10 or 20 years? Even if the target fund isn't technically when I would be retiring? I was looking at the 2050 fund for Vanguard. Wouldn't it just be simpler this way? I have read about tax complication because bonds are involved in some of these funds, but if I am not making a lot of money, then would it even matter?

I'm just not seeing much of a difference between doing this and picking a 3 fund portfolio.
I think it's a great way to keep things simple.

Don't let a desire for perfection keep you from enjoying a solution that is more than "good enough".
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Re: target retirement fund in a taxable account

Post by dodecahedron »

toot101 wrote: Mon May 03, 2021 10:03 am So I'm thinking of putting 75% into VTSAX and 25% into an international stock fund such as VTIAX or VWIGX. Would that be a good idea? Or just stick with VTSAX?
If you want to keep life simple, stick to VTSAX in a taxable account. International equities are generally less tax-efficient in a taxable account (unless you want to mess around with foreign tax credits, which are a paperwork pain once your "Foreign Tax Paid" exceeds $300 (or $600 MFJ.)

I decided last year that life was too short to keep messing with Form 1116 (Foreign Earned Income schedule) going forward and decided that henceforth, international equities would be held in Roth and HSA accounts, but not in taxable accounts.

(Yes, I know livesoft will quickly chime in with "What's the big deal?" because he appears to *enjoy* the Form 1116 challenge, but I am also mindful of paperwork burdens for those who will ultimately be responsible for taking over my finances when I am either incompetent and/or no longer on this earth.)

Also, I am at a stage of life where various types of MAGI management are potentially just as important as taxable income management (e.g., for IRMAA, senior property tax exemptions, NYS EPIC prescription drug coverage.) Because international stocks tend to have much higher dividend yields (and exact figures do not arrive until mid-Feb), holding substantial international in taxable made it hard to do end of year tax planning. Younger folks with concerns about ACA premium tax credits or cutoffs for child tax credits, stimulus, etc. may also be well-advised to watch their MAGI as well as their taxable income numbers and avoiding international in taxable can help with that.
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Re: target retirement fund in a taxable account

Post by livesoft »

dodecahedron wrote: Mon May 03, 2021 10:14 am (Yes, I know livesoft will quickly chime in with "What's the big deal?" because he appears to *enjoy* the Form 1116 challenge, but I am also mindful of paperwork burdens for those who will ultimately be responsible for taking over my finances when I am either incompetent and/or no longer on this earth.)
It is unlikely that the OP will exceed $600 in foreign taxes and thus will never have to fill out Form 1116.

Anyways, there is a lot going on in this thread now.
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Re: target retirement fund in a taxable account

Post by dodecahedron »

vineviz wrote: Mon May 03, 2021 10:06 am
toot101 wrote: Mon May 03, 2021 8:37 am Is there anything wrong with picking JUST a target retirement fund as my sole allocation in a personal taxable account at Vanguard? I have 50k in extra money that I do not need (I have an emergency fund).

I am married filing jointly.
Our household income in less than 85k a year between me and my wife, I believe we are currently in the 22% tax bracket, with 3.07% state income tax. This money is just extra that we don't currently need and probably never will until retirement.

I have posted other topics and got some suggestions with different funds, but honestly, is there anything wrong with just putting it all in a retirement fund and just leaving it for 10 or 20 years? Even if the target fund isn't technically when I would be retiring? I was looking at the 2050 fund for Vanguard. Wouldn't it just be simpler this way? I have read about tax complication because bonds are involved in some of these funds, but if I am not making a lot of money, then would it even matter?

I'm just not seeing much of a difference between doing this and picking a 3 fund portfolio.
I think it's a great way to keep things simple.

Don't let a desire for perfection keep you from enjoying a solution that is more than "good enough".
There is a lot to be said for simplicity! I am working toward that goal. If target date funds had been available back when my late husband and I were at the same age/stage as the OP, I think we would have been very well-served in the long run by just doing what the OP proposed at the top of this thread. (But my late husband was a tinkerer, and I am doing my best to exercise stewardship.)

Getting too fancy with tax strategies based on details of *current* tax law and *current* tax circumstances (bear in mind that rates are scheduled to go up in a few years even under existing tax law, plus there are potential future changes in your household size, filing status, income, disability, home ownership status, state tax location, unexpected inheritances, gifts, casualty losses, etc.) could ultimately be counterproductive.
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Re: target retirement fund in a taxable account

Post by dodecahedron »

livesoft wrote: Mon May 03, 2021 10:23 am
dodecahedron wrote: Mon May 03, 2021 10:14 am (Yes, I know livesoft will quickly chime in with "What's the big deal?" because he appears to *enjoy* the Form 1116 challenge, but I am also mindful of paperwork burdens for those who will ultimately be responsible for taking over my finances when I am either incompetent and/or no longer on this earth.)
It is unlikely that the OP will exceed $600 in foreign taxes and thus will never have to fill out Form 1116.
Unlikely, huh? That's what I used to think about going over $300 in foreign taxes. Then I unexpectedly did. And after thrashing through the Form 1116 once, I thought, "Self, do you want your daughters having to mess with this after you are no longer competent?" and decided to rebalance (with charitable donations of international from taxable) and purchases of international in Roth and HSA.
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Re: target retirement fund in a taxable account

Post by dodecahedron »

livesoft wrote: Mon May 03, 2021 10:23 am
dodecahedron wrote: Mon May 03, 2021 10:14 am (Yes, I know livesoft will quickly chime in with "What's the big deal?" because he appears to *enjoy* the Form 1116 challenge, but I am also mindful of paperwork burdens for those who will ultimately be responsible for taking over my finances when I am either incompetent and/or no longer on this earth.)
It is unlikely that the OP will exceed $600 in foreign taxes and thus will never have to fill out Form 1116.

Anyways, there is a lot going on in this thread now.
Agreed. A lot going on in this thread. To the OP, I think there is a lot to be said for your original simple plan of target retirement in taxable. Hopefully all of us with more arcane circumstances and experiences and history have not confused you too much!

I just went back and read your entire posting history. You are taking a huge step in the right direction by getting away from Prudential's claws. A Target in taxable sounds eminently reasonable and elegantly simple.
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Re: target retirement fund in a taxable account

Post by toot101 »

dodecahedron wrote: Mon May 03, 2021 10:41 am
livesoft wrote: Mon May 03, 2021 10:23 am
dodecahedron wrote: Mon May 03, 2021 10:14 am (Yes, I know livesoft will quickly chime in with "What's the big deal?" because he appears to *enjoy* the Form 1116 challenge, but I am also mindful of paperwork burdens for those who will ultimately be responsible for taking over my finances when I am either incompetent and/or no longer on this earth.)
It is unlikely that the OP will exceed $600 in foreign taxes and thus will never have to fill out Form 1116.

Anyways, there is a lot going on in this thread now.
Agreed. A lot going on in this thread. To the OP, I think there is a lot to be said for your original simple plan of target retirement in taxable. Hopefully all of us with more arcane circumstances and experiences and history have not confused you too much!

I just went back and read your entire posting history. You are taking a huge step in the right direction by getting away from Prudential's claws. A Target in taxable sounds eminently reasonable and elegantly simple.
Confused is an understatement at this point, I feel like I still have a lot of research to do. I did read John Bogles Common Sense Investing. I feel like I understand a lot more than I did a week ago, but I did not realize the tax implications to all of this.
gjankow
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Re: target retirement fund in a taxable account

Post by gjankow »

I have a taxable account only invested in the VG TR Income Fund. Does not hold much money. Sends me a dividend check every quarter. Main reason I have it is so that my wife can dump any life insurance proceeds there should I pass before her. Will create some income for her until the kids are launched. And hopefully will keep up with inflation with the 30% equities.

I value the simplicity and low cost (i.e. no AUM advisor fees) over any tax inefficiency.

Perfect? Probably not. Good enough? I hope so.
sycamore
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Re: target retirement fund in a taxable account

Post by sycamore »

toot101 wrote: Mon May 03, 2021 10:57 am
dodecahedron wrote: Mon May 03, 2021 10:41 am
livesoft wrote: Mon May 03, 2021 10:23 am
dodecahedron wrote: Mon May 03, 2021 10:14 am (Yes, I know livesoft will quickly chime in with "What's the big deal?" because he appears to *enjoy* the Form 1116 challenge, but I am also mindful of paperwork burdens for those who will ultimately be responsible for taking over my finances when I am either incompetent and/or no longer on this earth.)
It is unlikely that the OP will exceed $600 in foreign taxes and thus will never have to fill out Form 1116.

Anyways, there is a lot going on in this thread now.
Agreed. A lot going on in this thread. To the OP, I think there is a lot to be said for your original simple plan of target retirement in taxable. Hopefully all of us with more arcane circumstances and experiences and history have not confused you too much!

I just went back and read your entire posting history. You are taking a huge step in the right direction by getting away from Prudential's claws. A Target in taxable sounds eminently reasonable and elegantly simple.
Confused is an understatement at this point, I feel like I still have a lot of research to do. I did read John Bogles Common Sense Investing. I feel like I understand a lot more than I did a week ago, but I did not realize the tax implications to all of this.
OP, please consider reading the thread on Asking Portfolio Questions. It describes how to provide information so that you'll get the best responses on how to build your portfolio, including things like whether a Target fund is appropriate in a taxable account.
Mike Scott
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Re: target retirement fund in a taxable account

Post by Mike Scott »

OP, please consider reading the thread on Asking Portfolio Questions. It describes how to provide information so that you'll get the best responses on how to build your portfolio, including things like whether a Target fund is appropriate in a taxable account.
Yes, do this. The exercise of pulling together the information in one place may be helpful to you and it will also give the commenters much more context on how to address your questions better.
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toot101
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Re: target retirement fund in a taxable account

Post by toot101 »

Mike Scott wrote: Mon May 03, 2021 11:26 am
OP, please consider reading the thread on Asking Portfolio Questions. It describes how to provide information so that you'll get the best responses on how to build your portfolio, including things like whether a Target fund is appropriate in a taxable account.
Yes, do this. The exercise of pulling together the information in one place may be helpful to you and it will also give the commenters much more context on how to address your questions better.
I edited my original response with the info
retiredjg
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Re: target retirement fund in a taxable account

Post by retiredjg »

toot101 wrote: Mon May 03, 2021 8:37 am PGIM BALANCED FUND - PABCX - ER 1.77% Max Sales Charge 1% (I think, I have been told by others it's 5.5%) - $32,000
PGIM INCOME BUILDER - PCCFX - ER 1.7% - Max Sales Charge 1% - $25,000
Is this the money you are wanting to invest? Or is that an extra $50k? Very good choice to get rid of these. The expenses are very high and neither of these would be very tax-efficient to hold in a taxable account.

What are the short term and long term gains on these two funds? You are so far down into the 12% bracket that you can probably sell both of these in the same year without paying any/much capital gains taxes.
little_star
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Re: target retirement fund in a taxable account

Post by little_star »

You do not appear to have an IRA. As mentioned by livesoft and David Jay above, you should consider funding a Roth IRA with these extra $$. A Roth IRA has the advantage over a taxable account in that your funds grow tax-free and you can rebalance, or change your mind regarding investment choice, without tax consequences. The concern regarding investing in a target date fund in a taxable account is that you would be subject to capital gains (and taxes) if you decide to change funds if the glide-path provided by the fund does not match your preferred asset allocation in the future. Investing in a target-date fund in your Roth IRA means that you can switch to a different target-date fund without tax consequences. Others will say that a target-date fund is not the best choice for a Roth IRA either, since it will include some bond funds and Roth's are best filled with equities (high growth), but that is much less concerning than the risk of incurring large capital gains ten years from now when you are not pleased with the asset allocation in the target-date fund you chose for a taxable account.

So, I highly recommend that you *immediately* open Roth IRAs for you and your spouse. You can fund $6k each for both 2020 and 2021 tax years if you do this before May 17, 2021 (usually by April 15, but this year is different). That is $12k + $12k = $24k of your $50k excess.
retiredjg
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Re: target retirement fund in a taxable account

Post by retiredjg »

toot101 wrote: Mon May 03, 2021 8:37 am Wife and I together make around $85k a year with 40% of our income going into our 401k's, we file our taxes jointly as Married.
If you make $85k and put 40% of it into 401k plans and then subtract the $25,100 standard deduction, your taxable income is about $25,900 a year. This is way down into the the 12% bracket - with lots of space for your capital gains to be taxed at 0%.

In the 12% bracket, I think you should be putting some or a lot of your savings into Roth IRA or Roth 401k. Have you considered that? Also, your spouse can have an IRA based on your income. Another thing to consider.


What stock to bond ratio do you want for your portfolio?

Taxable Account $57k + $6,500 in various stocks


IRA $26,600


VOYA 401K $24,900:
Vanguard® 500 Index Fund - Admiral™ Shares - VFIAX - - ER .04% - $8,500
Vanguard® Mid-Cap Index Fund - Admiral™ Shares - VIMAX - ER .05% - $8,200
Vanguard® Small-Cap Index Fund - Admiral™ Shares - VSMAX - ER .05% - $8,200
HomeStretch
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Re: target retirement fund in a taxable account

Post by HomeStretch »

Agree with prior comments that a Target Date Fund is tax inefficient in a Taxable account and to consider holding VTSAX (US Total Stock Market) instead.

If you reduce the number of brokerages/accounts you have by consolidating at Vanguard and Voya, your portfolio should be much easier to manage, more tax efficient and have lower investment costs. The last two are worthwhile to focus on now as they will save you a lot over a lifetime of saving/investing.

Agree with moving the Prudential accounts ASAP due to high costs.
- Rollover the Prudential IRA to your Voya 401k.
- If the $57k in PABCX and PCCFX is in a Prudential Taxable account, sell and reinvest in VTSAX in a Vanguard Taxable account.

Assuming the $50k you have to invest is in addition to the $57k in your Prudential Taxable account, consider investing:
- $26k in VTSAX in a Vanguard Taxable account.
- $24k in Vanguard Roth IRAs for you and spouse (if eligible and have not made IRA contributions already) for 2020 (by 5/17/21) and 2021. Invest in VFIAX (S&P 500) so you don’t hold the same fund as in the Taxable account to help avoid wash sales.

Invest the $51.5k (includes the rollover in of the Prudential IRA) in your Voya 401k according to your asset allocation in a Target Date Fund or in US Bond/International Total Stock Market/Vanguard 500 Index Fund. Do you have these funds available in your 401k?

If you prefer the convenience of having all your accounts (aside from your 401k) at Vanguard, you can initiate at Vanguard an account transfer of the individual stocks held at ETrade into a Vanguard Taxable account.
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toot101
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Re: target retirement fund in a taxable account

Post by toot101 »

HomeStretch wrote: Mon May 03, 2021 12:27 pm Agree with prior comments that a Target Date Fund is tax inefficient in a Taxable account and to consider holding VTSAX (US Total Stock Market) instead.

If you reduce the number of brokerages/accounts you have by consolidating at Vanguard and Voya, your portfolio should be much easier to manage, more tax efficient and have lower investment costs. The last two are worthwhile to focus on now as they will save you a lot over a lifetime of saving/investing.

Agree with moving the Prudential accounts ASAP due to high costs.
- Rollover the Prudential IRA to your Voya 401k.
- If the $57k in PABCX and PCCFX is in a Prudential Taxable account, sell and reinvest in VTSAX in a Vanguard Taxable account.

I think this is what I am going to end up doing

Assuming the $50k you have to invest is in addition to the $57k in your Prudential Taxable account, consider investing:
- $26k in VTSAX in a Vanguard Taxable account.
- $24k in Vanguard Roth IRAs for you and spouse (if eligible and have not made IRA contributions already) for 2020 (by 5/17/21) and 2021. Invest in VFIAX (S&P 500) so you don’t hold the same fund as in the Taxable account to help avoid wash sales.

Nope, the 50k that is currently in Prudential is what is going to be sold and put in Vanguard soon. Also already maxed out our IRA's for the year. I have also heard that Roth IRA's are for people who expect to have high income during retirement, which we definitely do not expect to go much above 100k total income between the both of us within the next 20 years

Invest the $51.5k (includes the rollover in of the Prudential IRA) in your Voya 401k according to your asset allocation in a Target Date Fund or in US Bond/International Total Stock Market/Vanguard 500 Index Fund. Do you have these funds available in your 401k?

With my IRA funds, I only have 26k available to transfer

If you prefer the convenience of having all your accounts (aside from your 401k) at Vanguard, you can initiate at Vanguard an account transfer of the individual stocks held at ETrade into a Vanguard Taxable account.

At the end of the year, I am planning on selling off most of my stocks and transferring the extra money to Vanguard. I only have an ETrade account because of the crash back in March, so I bought a lot of stocks while they were low and sold them once I thought they made enough. The ones I have left are just an experiment. I will most likely not touch Etrade again until the next market crash
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toot101
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Re: target retirement fund in a taxable account

Post by toot101 »

little_star wrote: Mon May 03, 2021 12:05 pm You do not appear to have an IRA. As mentioned by livesoft and David Jay above, you should consider funding a Roth IRA with these extra $$. A Roth IRA has the advantage over a taxable account in that your funds grow tax-free and you can rebalance, or change your mind regarding investment choice, without tax consequences. The concern regarding investing in a target date fund in a taxable account is that you would be subject to capital gains (and taxes) if you decide to change funds if the glide-path provided by the fund does not match your preferred asset allocation in the future. Investing in a target-date fund in your Roth IRA means that you can switch to a different target-date fund without tax consequences. Others will say that a target-date fund is not the best choice for a Roth IRA either, since it will include some bond funds and Roth's are best filled with equities (high growth), but that is much less concerning than the risk of incurring large capital gains ten years from now when you are not pleased with the asset allocation in the target-date fund you chose for a taxable account.

So, I highly recommend that you *immediately* open Roth IRAs for you and your spouse. You can fund $6k each for both 2020 and 2021 tax years if you do this before May 17, 2021 (usually by April 15, but this year is different). That is $12k + $12k = $24k of your $50k excess.
The Jennison Global funds are my current IRA funds, which I already maxed out for the year. I have read that Roth IRA's are for people who expect to have a high income while retired, which I am not expecting to have anywhere near what would be considered a high income.
retiredjg
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Re: target retirement fund in a taxable account

Post by retiredjg »

toot101 wrote: Mon May 03, 2021 1:56 pm I have also heard that Roth IRA's are for people who expect to have high income during retirement, which we definitely do not expect to go much above 100k total income between the both of us within the next 20 years.
This is actually backwards.

If you were in the 24% tax bracket now and expected to be in the 12% bracket in the future, you would want to defer taxes till later so that you can pay tax on the same dollars at a lower rate.

Your situation is the opposite. You are very likely now at the lowest tax rate you will ever be. It is good to get money into Roth IRA while rates are low and then use it (tax free) when rates are higher.
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Re: target retirement fund in a taxable account

Post by David Jay »

retiredjg wrote: Mon May 03, 2021 2:14 pmYou are very likely now at the lowest tax rate you will ever be. It is good to get money into Roth IRA while rates are low and then use it (tax free) when rates are higher.
+1
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
HomeStretch
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Re: target retirement fund in a taxable account

Post by HomeStretch »

+1 to retiredjg’s post.

The decision whether to contribute to Roth v. Traditional starts with evaluating your marginal tax rate now at contribution vs. your rate at withdrawal in retirement. If your rate is higher now, then Traditional makes sense. If lower now, then Roth makes sense.

Consider making Roth contributions now as you are in the 12% tax bracket (which is scheduled to revert to 15% in 2026). Or doing a mix - some to Traditional and some to Roth. This BH wiki page may be helpful:
https://www.bogleheads.org/wiki/Traditional_versus_Roth
Last edited by HomeStretch on Mon May 03, 2021 3:28 pm, edited 1 time in total.
HomeStretch
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Re: target retirement fund in a taxable account

Post by HomeStretch »

toot101 wrote: Mon May 03, 2021 1:56 pm
HomeStretch wrote: Mon May 03, 2021 12:27 pm Invest the $51.5k (includes the rollover in of the Prudential IRA) in your Voya 401k according to your asset allocation in a Target Date Fund or in US Bond/International Total Stock Market/Vanguard 500 Index Fund. Do you have these funds available in your 401k?
With my IRA funds, I only have 26k available to transfer
The $51.5k equals your current 401k balance of $24.9k + the future rollover of the two Prudential IRAs of $26.6k into your Voya 401k.
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toot101
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Re: target retirement fund in a taxable account

Post by toot101 »

HomeStretch wrote: Mon May 03, 2021 3:17 pm +1 to retiredjg’s post.

The decision whether to contribute to Roth v. Traditional starts with evaluating your marginal tax rate now at contribution vs. your rate at withdrawal in retirement. If your rate is higher now, then Traditional makes sense. If lower now, then Roth makes sense.

Consider making Roth contributions now as you are in the 12% tax bracket (which is scheduled to revert to 15% in 2026). Or doing a mix - some to Traditional and some to Roth. This BH wiki page may be helpful:
https://www.bogleheads.org/wiki/Traditional_versus_Roth
As far as Roth's go. We basically live off of less than 30k a year, between withdrawing whatever is left of SS and our 401k's when we retire, I can't see us going much above that (whatever the inflation equivalent of 30k is today. Plus we live in PA, which does not charge tax on retirement income such as SS
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David Jay
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Re: target retirement fund in a taxable account

Post by David Jay »

toot101 wrote: Mon May 03, 2021 4:05 pm
HomeStretch wrote: Mon May 03, 2021 3:17 pm +1 to retiredjg’s post.

The decision whether to contribute to Roth v. Traditional starts with evaluating your marginal tax rate now at contribution vs. your rate at withdrawal in retirement. If your rate is higher now, then Traditional makes sense. If lower now, then Roth makes sense.

Consider making Roth contributions now as you are in the 12% tax bracket (which is scheduled to revert to 15% in 2026). Or doing a mix - some to Traditional and some to Roth. This BH wiki page may be helpful:
https://www.bogleheads.org/wiki/Traditional_versus_Roth
As far as Roth's go. We basically live off of less than 30k a year, between withdrawing whatever is left of SS and our 401k's when we retire, I can't see us going much above that (whatever the inflation equivalent of 30k is today. Plus we live in PA, which does not charge tax on retirement income such as SS
Read up on Required Minimum Distributions (RMDs). You will be required to take money out of your tax deferred beginning at age 72. So you will be paying taxes on much more than $30,000 a year.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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toot101
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Re: target retirement fund in a taxable account

Post by toot101 »

Just a couple additional questions...

Since I can't start a Roth IRA this year because I already maxed out...(Plus I don't think I really need one since Pennsylvania doesn't tax retirement accounts)

I have decided to roll my traditional IRA into a Vanguard IRA instead of my current 401k. (I may be leaving before the end of the year and I believe you can only do one rollover per 365 days without some sort of penalty)

1. As far as the taxes that everyone has talked about regarding international funds, would that still apply if I bought into VTWAX for my IRA since it is a tax advantaged account?

2. As far as the 50k I am transferring over, would it be better to buy MORE of a less expensive fund than to buy less of a more expensive fund?
Example: Instead of buying 500 shares of VTSAX at $100+ a share, I buy around 1500 shares of something within the $30 range. Does it matter that much as far as getting "more bang for my buck"?
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Re: target retirement fund in a taxable account

Post by retiredjg »

toot101 wrote: Wed May 05, 2021 8:30 am I have decided to roll my traditional IRA into a Vanguard IRA instead of my current 401k. (I may be leaving before the end of the year and I believe you can only do one rollover per 365 days without some sort of penalty)
Rolling into or out of a 401k does not count as your one per 365.

1. As far as the taxes that everyone has talked about regarding international funds, would that still apply if I bought into VTWAX for my IRA since it is a tax advantaged account?
What taxes?

Total World is fine in any kind of account you want to put it in.

2. As far as the 50k I am transferring over, would it be better to buy MORE of a less expensive fund than to buy less of a more expensive fund?
Example: Instead of buying 500 shares of VTSAX at $100+ a share, I buy around 1500 shares of something within the $30 range. Does it matter that much as far as getting "more bang for my buck"?
No. Price per share has nothing to do with your choice. No more and no less bang for the buck.
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toot101
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Re: target retirement fund in a taxable account

Post by toot101 »

retiredjg wrote: Wed May 05, 2021 8:41 am
toot101 wrote: Wed May 05, 2021 8:30 am I have decided to roll my traditional IRA into a Vanguard IRA instead of my current 401k. (I may be leaving before the end of the year and I believe you can only do one rollover per 365 days without some sort of penalty)
Rolling into or out of a 401k does not count as your one per 365.

Thanks, I must have misinterpreted what I read
1. As far as the taxes that everyone has talked about regarding international funds, would that still apply if I bought into VTWAX for my IRA since it is a tax advantaged account?
What taxes?

A couple people on here mentioned foreign taxes:
I decided last year that life was too short to keep messing with Form 1116 (Foreign Earned Income schedule) going forward and decided that henceforth, international equities would be held in Roth and HSA accounts, but not in taxable accounts.

Wasn't sure if that mattered for traditional IRA's as well as Roth IRA's

Total World is fine in any kind of account you want to put it in.

2. As far as the 50k I am transferring over, would it be better to buy MORE of a less expensive fund than to buy less of a more expensive fund?
Example: Instead of buying 500 shares of VTSAX at $100+ a share, I buy around 1500 shares of something within the $30 range. Does it matter that much as far as getting "more bang for my buck"?
No. Price per share has nothing to do with your choice. No more and no less bang for the buck.
retiredjg
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Re: target retirement fund in a taxable account

Post by retiredjg »

toot101 wrote: Wed May 05, 2021 9:01 am A couple people on here mentioned foreign taxes:

I decided last year that life was too short to keep messing with Form 1116 (Foreign Earned Income schedule) going forward and decided that henceforth, international equities would be held in Roth and HSA accounts, but not in taxable accounts.

Wasn't sure if that mattered for traditional IRA's as well as Roth IRA's
Ok. I see what you mean. No, that form does not apply to IRAs.

I'm a little stumped. International Index funds have been recommended for taxable accounts for all the years I have been here. Not sure what the recent deal is with this foreign tax credit Form. I don't recall it being mentioned as burdensome in past years and don't recall anyone saying (before this) they would no longer hold international in taxable for that reason.

Has something changed? Or do people just have large amounts of international in taxable? Maybe I just didn't read those threads? Maybe someone with international in a taxable account could answer.

Or maybe just hold total stock index in taxable.


Regarding the once per year....https://www.irs.gov/retirement-plans/pl ... tributions

The one-per year limit does not apply to:

rollovers from traditional IRAs to Roth IRAs (conversions)
trustee-to-trustee transfers to another IRA
IRA-to-plan rollovers
plan-to-IRA rollovers
plan-to-plan rollovers



(plan here refers to work plans like a 401k, etc.)
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toot101
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Re: target retirement fund in a taxable account

Post by toot101 »

retiredjg wrote: Wed May 05, 2021 9:25 am
toot101 wrote: Wed May 05, 2021 9:01 am A couple people on here mentioned foreign taxes:

I decided last year that life was too short to keep messing with Form 1116 (Foreign Earned Income schedule) going forward and decided that henceforth, international equities would be held in Roth and HSA accounts, but not in taxable accounts.

Wasn't sure if that mattered for traditional IRA's as well as Roth IRA's
Ok. I see what you mean. No, that form does not apply to IRAs.

I'm a little stumped. International Index funds have been recommended for taxable accounts for all the years I have been here. Not sure what the recent deal is with this foreign tax credit Form. I don't recall it being mentioned as burdensome in past years and don't recall anyone saying (before this) they would no longer hold international in taxable for that reason.

Has something changed? Or do people just have large amounts of international in taxable? Maybe I just didn't read those threads? Maybe someone with international in a taxable account could answer.

Or maybe just hold total stock index in taxable.

I'm thinking a lot of people here have a ton of money and probably need to worry more about tax, at this point in my life, I wonder if those type of taxes would even apply/matter to me, unless it's way way down the road from now.

Regarding the once per year....https://www.irs.gov/retirement-plans/pl ... tributions

The one-per year limit does not apply to:

rollovers from traditional IRAs to Roth IRAs (conversions)
trustee-to-trustee transfers to another IRA
IRA-to-plan rollovers
plan-to-IRA rollovers
plan-to-plan rollovers



(plan here refers to work plans like a 401k, etc.)
Thanks for the clarification on that!
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dodecahedron
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Re: target retirement fund in a taxable account

Post by dodecahedron »

retiredjg wrote: Wed May 05, 2021 9:25 am
toot101 wrote: Wed May 05, 2021 9:01 am A couple people on here mentioned foreign taxes:

I decided last year that life was too short to keep messing with Form 1116 (Foreign Earned Income schedule) going forward and decided that henceforth, international equities would be held in Roth and HSA accounts, but not in taxable accounts.

Wasn't sure if that mattered for traditional IRA's as well as Roth IRA's
Ok. I see what you mean. No, that form does not apply to IRAs.

I agree and that is one of several reasons why I am much happier holding my international equity allocation in my Roth IRA

I'm a little stumped. International Index funds have been recommended for taxable accounts for all the years I have been here. Not sure what the recent deal is with this foreign tax credit Form. I don't recall it being mentioned as burdensome in past years and don't recall anyone saying (before this) they would no longer hold international in taxable for that reason.

Has something changed? Or do people just have large amounts of international in taxable? Maybe I just didn't read those threads? Maybe someone with international in a taxable account could answer.

That would have been me, previously. I have a large taxable account, which previously held a significant chunk equities in international (as well as domestic).

Both the large dividend distributions from total international (relative to total stock, which has much smaller dividend yields) and the growing challenges of unpredictable foreign taxes paid unexpectedly requiring Form 1116 made me decide to just move my international equities to my Roth IRA and HSA accounts going forward. Especially for those of us who need to watch our MAGI for IRMAA, SS taxability, and senior real estate tax breaks, international in taxable was a pain.


Or maybe just hold total stock index in taxable.

That's what I do now, just domestic equities in taxable. Keeps my AGI/MAGI lower and no more worries about me or my eventual POA/executor needing to mess around with Form 1116.
toot101 wrote:I'm thinking a lot of people here have a ton of money and probably need to worry more about tax, at this point in my life, I wonder if those type of taxes would even apply/matter to me, unless it's way way down the road from now.
I am in a very stage of life and (likely) accumulation totals from you, toot101, but the AGI/MAGI issues associated with the greater dividend payouts on international equities could also be issues for younger folks concerned with qualifying for the new expanded child tax credits, ACA premium subsidies, stimulus payments, other refundable credits, etc.
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Re: target retirement fund in a taxable account

Post by retiredjg »

toot101 wrote: Wed May 05, 2021 9:40 am I'm thinking a lot of people here have a ton of money and probably need to worry more about tax, at this point in my life, I wonder if those type of taxes would even apply/matter to me, unless it's way way down the road from now.
Just so you will know, the discussion is not about the taxes, but about you getting credit for taxes that your funds paid to foreign countries.

When you hold foreign stocks, there is some amount of tax that the fund pays to the foreign countries. For your US taxes, you get "credit" for that foreign tax that was paid on your behalf. A little bit of foreign tax does not require this form people are talking about. But if the foreign taxes go above a certain amount, you have to file a form to get credit for it.

I've never been involved with this, but I think I've got it close to right. Others will let us know if I've bungled this explanation.

I'm not at all sure that you would be in that category of needing to file that form. In fact, I'm a little bit confident that your $50k (even if all invested in international stocks) would not trigger that form. I am also not sure how much of a hassle that form is.

As for your original question, as long as you stay in a very low tax bracket, even the target fund would not be much of an issue in the taxable account. Holding just a total stock index alone would eliminate all the issues though.
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toot101
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Re: target retirement fund in a taxable account

Post by toot101 »

retiredjg wrote: Wed May 05, 2021 11:46 am
toot101 wrote: Wed May 05, 2021 9:40 am I'm thinking a lot of people here have a ton of money and probably need to worry more about tax, at this point in my life, I wonder if those type of taxes would even apply/matter to me, unless it's way way down the road from now.
Just so you will know, the discussion is not about the taxes, but about you getting credit for taxes that your funds paid to foreign countries.

When you hold foreign stocks, there is some amount of tax that the fund pays to the foreign countries. For your US taxes, you get "credit" for that foreign tax that was paid on your behalf. A little bit of foreign tax does not require this form people are talking about. But if the foreign taxes go above a certain amount, you have to file a form to get credit for it.

I've never been involved with this, but I think I've got it close to right. Others will let us know if I've bungled this explanation.

I'm not at all sure that you would be in that category of needing to file that form. In fact, I'm a little bit confident that your $50k (even if all invested in international stocks) would not trigger that form. I am also not sure how much of a hassle that form is.

As for your original question, as long as you stay in a very low tax bracket, even the target fund would not be much of an issue in the taxable account. Holding just a total stock index alone would eliminate all the issues though.
This makes a lot more sense to me now. Thank you!
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