Bonds in Tax-Deferred Account

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Random Poster
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Bonds in Tax-Deferred Account

Post by Random Poster » Fri Apr 23, 2010 7:27 am

I understand that it is preferred to place one's bonds in a tax-deferred account and one's equities in a taxable account.

Is there an academic study or spreadsheet that shows why such a portfolio placement is the preferred method?

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anthau
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Post by anthau » Fri Apr 23, 2010 7:40 am

The links in the wiki are a starting point.
Best, | | Anth

DSInvestor
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Post by DSInvestor » Fri Apr 23, 2010 9:52 am

Vanguard has this paper called "Asset Location for Taxable Investors:"
https://institutional.vanguard.com/iip/ ... cation.pdf

There are lots of other papers available at this page:
https://personal.vanguard.com/us/litera ... mentguides

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abuss368
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Post by abuss368 » Fri Apr 23, 2010 1:53 pm

Consider bonds in the taxable accounts if there is not enough room in the tax deferred accounts.

If you are placing bonds in taxable accounts, consider your combined effective income tax rates between federal and state. It may be more appropriate for tax exempt bonds (i.e. Intermediate Term Tax Exempt Fund) rather than taxable bonds (i.e. Total Bond Market Index Fund).

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