Need Bonds in a taxable account, help!!!

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Rajsx
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Need Bonds in a taxable account, help!!!

Post by Rajsx » Mon Dec 12, 2011 7:19 pm

My Asset Allocation calls for more bonds for present saving contributions , no room in retirement accounts apart from this year's 6k + 6k into my & DW respective Roth IRAs. I am looking for a Bond Fund for the Taxable account. I do have the Vanguard Tax Exempt Interm Term Bond Fund already in my taxable Acc funded in prior years.

Any suggestions as to a more tax efficient Bond Type(or Vips) Vang fund ? I know it sounds crazy, but I will do what I need to do to maintain my Asset Allocation. I do have to resist myself from buying the Stock Funds which are a good buy these days.

Thanks in advance for any and all suggestions........
We do not stop laughing because we grow old, we grow old because we stop laughing !!

donocash
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Re: Need Bonds in a taxable account, help!!!

Post by donocash » Mon Dec 12, 2011 7:28 pm

Why do you not choose to place more money in Vanguard Tax Exempt Intermediate Term Bond Fund?

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grabiner
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Re: Need Bonds in a taxable account, help!!!

Post by grabiner » Mon Dec 12, 2011 7:32 pm

Rajsx wrote:My Asset Allocation calls for more bonds for present saving contributions , no room in retirement accounts apart from this year's 6k + 6k into my & DW respective Roth IRAs. I am looking for a Bond Fund for the Taxable account. I do have the Vanguard Tax Exempt Interm Term Bond Fund already in my taxable Acc funded in prior years.

Any suggestions as to a more tax efficient Bond Type(or Vips) Vang fund ?
Assuming you are in a fairly high tax bracket, the only way to get a more tax-efficient bond fund is to use a muni fund for your state. And if the fund for your state is not a Vanguard fund, it is likely that the higher expenses will outweight the tax savings.

Intermediate-Term Tax-Exempt is the most commonly used muni fund in a taxable account; it's roughly equivalent to Total Bond Market in interest-rate risk, with a bit more credit risk since Total Bond Market has a lot of government bonds.
Wiki David Grabiner

DSInvestor
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Re: Need Bonds in a taxable account, help!!!

Post by DSInvestor » Mon Dec 12, 2011 7:36 pm

After you have filled your tax advantaged space with bonds, you could buy I bonds as well as tax exempt bond funds in the taxable account to complete your bond allocation.
Wiki article link: I Savings Bonds
Wiki

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Steelersfan
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Re: Need Bonds in a taxable account, help!!!

Post by Steelersfan » Mon Dec 12, 2011 9:16 pm

I have a small allocation of iBonds and a larger allocation in Intermediate Term Tax Exempt in my taxable portfolio.

That works for me.

I hope.

Bob's not my name
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Re: Need Bonds in a taxable account, help!!!

Post by Bob's not my name » Tue Dec 13, 2011 6:09 am

grabiner wrote:the only way to get a more tax-efficient bond fund is to use a muni fund for your state
Rajsx wrote:Location: Florida
:)

FinanceFun
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Re: Need Bonds in a taxable account, help!!!

Post by FinanceFun » Tue Dec 13, 2011 7:14 am

I have the same issue. I moved into MUB. 3.5% yield on a national muni etf. Been very happy with it.

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kingsnake
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Re: Need Bondscin a taxable account, help!!!

Post by kingsnake » Tue Dec 13, 2011 9:51 am

I use Vanguard Limited Term Tax Exempt and max out I bonds...

grok87
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Re: Need Bonds in a taxable account, help!!!

Post by grok87 » Tue Dec 13, 2011 9:57 am

FIrst I would max out Ibonds. If you are married you can do $20 k this year ($5 k each electronic and $5k each paper) and $10 k next year (no paper unless you can do with a tax refund)
After that I would barbell between an FDIC savings account yielding 1% and the vanguard long term tax exempt bond fund
see this thread
http://www.bogleheads.org/forum/viewtopic.php?t=73669
cheers,
Keep calm and Boglehead on. KCBO.

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