Tax-efficient fund placement question about my portfolio

[retirewithjoy]

Hi

I am retiring in 6 months and keep adjusting my accounts based on bogglehead principals and have one last item for placement.

Current:

40 % Taxable
40 % TaxDefer
20 % Taxfree

Taxable 74 Stocks 26 Fixed
TaxDefer 35 Stocks 65 Fixed
TaxFree 80 Stocks 20 Fixed
Total = 60 /40

Those were different before I read up on tax efficent placement on boggleheads.

Now I am trying to finalize it.

I doubt I ever spend the TaxFree since that is the last money I would spend and will most likely go to charity and kids

Should I just make Taxfree 100% and leave it be. Make it 100% VT and then remove the same amount of VT from TaxDefer to keep overall 60/40.
Or do I wait for a dip and then move from Defer to TF or do nothing.

Also should I take the Taxable to 80-20 or 90-10?

Right now it has enough Fixed for around fives years of expenses.
That is why I was thinking to drop it even lower from 74-26 for like 2-3 years of expenses or ???

If I did that, I would go from

Taxable: 74/26 to 80/20
Taxdefer: 35/65 to 20/80
Taxfree 80/20 to 100/0

Overall still 60/40

Not sure which is best.

I figure the less Fixed in Taxable the fewer taxes and the fewer stocks on Taxdefer, the slower it grows which effects RMDs

Overall I have the same total 60/40 , it is about placement of the 60/40

None of what I suggested changing would cause a tax hit since I would be only buying into taxable if I make the change.

I am open to all ideas,

Thanks

[sycamore]

Your target AA is 60/40.
Your tax-deferred accounts happen to be 40% of the portfolio.
It's reasonable sense to put your full bond allocation in tax-deferred.
As a result, you would then hold only stocks in taxable and tax-free.

You may ask, what happens when there's a big drop in either stocks or bonds... how does one rebalance?
If you're low on bonds, you'll sell some stocks in tax-free or taxable, and buy bonds.
If you're low on stocks, you'll sell some bonds in tax-deferred, and buy stocks.

So it's quite possible you'll end up with both bonds and stocks in at least one account. That's okay, too.

Minimizing taxes is a reasonable goal, and that often can be done by keeping bonds out of taxable. Some people prefer simplicity and go for a single fund (usually balanced, or target date) in all accounts. That's reasonable, too. Based on your priorities ("I figure the less Fixed in Taxable the fewer taxes") I'd place more bonds in tax-deferred.

[retired@50]

I doubt I ever spend the TaxFree since that is the last money I would spend and will most likely go to charity and kids
I am open to all ideas,

I'd use tax-deferred accounts for charitable giving instead of "TaxFree" (presumably this means Roth accounts). Your kids will appreciate inheriting Roth money over tax-deferred money.

The charity won't have to pay income taxes on the tax-deferred money.

Regards,

[retirewithjoy]

thanks I forgot about QCDs count towards RMDs

what about the rest, should i set taxfree to 100% stock ? and add stock to taxable ?