Questions - opening my first taxable investment account

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ChrisO
Posts: 46
Joined: Fri May 11, 2018 8:07 am

Questions - opening my first taxable investment account

Post by ChrisO » Mon Jan 13, 2020 9:50 am

Hello, I recently finished my degree and got a new job. My salary this year will be close to double of what I made last year. This will allow me to max out my 401k, Roth IRA, HSA, and I already have a 6 month+ emergency fund. I am currently able to live very cheaply so I will still have around 5-10k+ after this to invest so I m looking at opening a taxable account. My Roth IRA and 401k are with fidelity.

Current 401k:
100% in Fidelity S&P 500 fund (lowest cost fund and don't have total market option)

Roth IRA
40% Fidelity® ZERO Large Cap Index Fund FNILX
40% Fidelity® ZERO Extended Market Index Fund FZIPX (thinking of changing this one)
20% Fidelity® Total Intl Index Fund FTIHX

Age 30, single, 22% tax bracket, State 4.25%
desired allocation: 100% stocks

Questions:

1.) Would fidelity or vanguard be better for a taxable account? I would prefer fidelity since my 401k and Roth are there so it would be easier to manage. However, if vanguard has better, more tax efficient funds I will use them.

2. What are the the most tax efficient funds for a taxable account? I imagine the Total U.S. Stock market or the total world market index fund would be the simplest and most tax efficient. I do perfer not holding the Total Market and spiting up 25% large, 25% mid, and 25% small, and 25% international, but I imagine this would be a nightmare to manage and balance in a taxable account :annoyed

3. Are the ETFs versions the most tax efficient of these funds?

4: Any other tips to manage the account or taxes? Thanks!

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djpeteski
Posts: 892
Joined: Fri Mar 31, 2017 9:07 am

Re: Questions - opening my first taxable investment account

Post by djpeteski » Mon Jan 13, 2020 10:11 am

ChrisO wrote:
Mon Jan 13, 2020 9:50 am
1.) Would fidelity or vanguard be better for a taxable account? I would prefer fidelity since my 401k and Roth are there so it would be easier to manage. However, if vanguard has better, more tax efficient funds I will use them.
I'll field this one. In your case I would open the taxable at Fidelity. You are probably use to their interface and there is less cognitive friction.

Personally, I am not overly concerned about maximizing tax efficiency in my taxable. Some may think I am dumb for this reason.

student
Posts: 4286
Joined: Fri Apr 03, 2015 6:58 am

Re: Questions - opening my first taxable investment account

Post by student » Mon Jan 13, 2020 10:25 am

Either Vanguard or Fidelity is fine. Personally, I do not like to have everything with one company, so maybe you can take a look at Schwab or Merrill Edge (for its preferred rewards.)

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