Yes, given that stocks hopefully will grow more allowing you to take advantage of the 0% tax rate.
1. I have kept bonds out of the Roth that is the correct move?
What's the rate of the CD or high interest checking? Even if it's decent, I have found banks to lower rates quickly or reinvest at low rates. Thus, I prefer the money market options in a brokerage account, or brokered CDs/treasuries with X duration to lock in the rate if I know the spending/purchase won't be for X years.2. I'm looking to find a place to put my cash, ... if I do finally put this cash somewhere and that changes then I don't have a large savings to pursue a house, but on the flip side leaving the cash just sit there in a CD or High interest checking I realize isn't smart either.
In tax advantaged accounts, it doesn't matter.3. I have also stayed with the above index funds but see so much conflicting information on going with FSKAK or FXIAX, or some of the VT/VTI or even just going with all ETFs. In the tax advantaged accounts does this matter as much?
In taxable, it doesn't matter significantly, however, ETFs are a little more tax efficient than mutual funds. If you go back and look at dividend distributions by FXIAX or FSKAX around 2017 or so, you'll see some short term capital gains distribution (taxed at nominal rates) and long term capital gain distributions you may pay 15% on. The ETF won't generally make those distributions and you won't have to pay taxes on those amounts until you sell (and short term will likely be long term and a lower rate). But it doesn't happen every year, and the amount isn't huge, so the overall effect might be 0.04% difference (depending on fund and time frame). Index fund are largely tax efficient so nobody is going to say DON'T hold the mutual fund in taxable because it's not a big difference and sometimes simplicity is easiest.
It's better to have international in taxable and not in tax sheltered. The reason is the international indexes will pay tax on dividends to the host country and you can claim a foreign tax credit for that amount if it is in taxable, but you can't claim a tax credit if it is in tax sheltered. It might be 10% or 15% of dividends so it's worthwhile to hold in taxable instead of tax sheltered. Sometimes you can't claim the whole credit though ....4. If I were to open up a taxable account and start putting some of my cash savings in that, is it better to switch to ETF or stay with the same funds i'm already using? I've read I don't want to keep bonds in a taxable, but does the total US vs international index matter?
S&P 500 or total market? Either way is a beautiful sunny day. I can't see the choice one way or other being material to your happiness, but in the extreme, one fund may do a little better than the other. I don't know which though.Would switching it up and going with FXIAX in the taxable be better, or just stick with FSKAK?
Statistics: Posted by typical.investor — Tue Jan 21, 2025 6:18 pm
