Bonds in taxable

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nydoc
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Bonds in taxable

Post by nydoc »

Does anyone buy bonds in taxable account? If yes, which ones? All my bonds are in 401k.
Thanks.
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BolderBoy
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Re: Bonds in taxable

Post by BolderBoy »

nydoc wrote: Fri Dec 04, 2020 10:41 pmDoes anyone buy bonds in taxable account? If yes, which ones? All my bonds are in 401k.
Yes, Vanguard Intermediate Term Tax-Exempt.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
theorist
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Re: Bonds in taxable

Post by theorist »

nydoc wrote: Fri Dec 04, 2020 10:41 pm Does anyone buy bonds in taxable account? If yes, which ones? All my bonds are in 401k.
Thanks.
Yes, I live in CA and am in a high tax bracket. At various times I have bought

Vanguard intermediate term tax exempt

Vanguard California intermediate term tax exempt

Vanguard California long term tax exempt

Right now I hold the first two. The advantage of the CA funds is that they are exempt from state tax as well; there may be similar funds for New York. However that needs to be balanced against the difference in yield to see if the state specific fund really yields more after taxes, and in any case, there is (at least slightly) more risk in holding bonds specific to one state — though all of these are high quality bond funds.
poker27
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Re: Bonds in taxable

Post by poker27 »

BolderBoy wrote: Fri Dec 04, 2020 10:43 pm
nydoc wrote: Fri Dec 04, 2020 10:41 pmDoes anyone buy bonds in taxable account? If yes, which ones? All my bonds are in 401k.
Yes, Vanguard Intermediate Term Tax-Exempt.
Same. For mental reasons, I like to have a similar AA with both my taxable and 401k
fujiters
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Re: Bonds in taxable

Post by fujiters »

I've started buying my annual limit of I bonds and EE bonds, which can only be held in taxable (which is not even an issue because the interest is tax deferred until redeption--extra tax advantaged space and superior interest rates!).
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VictorStarr
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Re: Bonds in taxable

Post by VictorStarr »

theorist wrote: Fri Dec 04, 2020 11:55 pm
nydoc wrote: Fri Dec 04, 2020 10:41 pm Does anyone buy bonds in taxable account? If yes, which ones? All my bonds are in 401k.
Thanks.
Yes, I live in CA and am in a high tax bracket. At various times I have bought

Vanguard intermediate term tax exempt

Vanguard California intermediate term tax exempt

Vanguard California long term tax exempt
I am in similar situation and invest into Vanguard California intermediate term tax exempt, Vanguard California long term tax exempt and Vanguard Tax-Exempt Bond Index Fund ETF.
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birdog
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Re: Bonds in taxable

Post by birdog »

I used to hold VTEB (Vanguard Tax Exempt Bond) in my taxable account because of my high marginal tax bracket but then realized that it was only advisable to do that if all tax-deferred space was already full, which mine was not. I then sold it and now hold only VTI (Vanguard Total Stock Market) in my taxable account. My tax-deferred account contains BIV (Vanguard Intermediate Term Bond) up to my desired AA & the rest is VTI.
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avenger
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Re: Bonds in taxable

Post by avenger »

BolderBoy wrote: Fri Dec 04, 2020 10:43 pm
nydoc wrote: Fri Dec 04, 2020 10:41 pmDoes anyone buy bonds in taxable account? If yes, which ones? All my bonds are in 401k.
Yes, Vanguard Intermediate Term Tax-Exempt.
Same. I have a high tax rate so this works for me.

My 457 is already completely filled with stable value fund.

In fact, it’s all I’m buying these days.
cheers ... -Mark | "Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau | [VTI, VXUS, VWITX, SV fund]
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anon_investor
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Re: Bonds in taxable

Post by anon_investor »

Yes, Series I US Savings Bonds (aka I Bonds):
https://www.bogleheads.org/wiki/I_savings_bonds

Near zero default risk since it is issued by the US Treasury. The current offered composite rate of 1.76% is superior to Total Bond. The interest is exempt from state income tax and the federal income tax can be deferred until the bond is redeemed (can be held for up to 30 years).
mike_in_ny
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Re: Bonds in taxable

Post by mike_in_ny »

NYDoc-
Also in NY and I do buy Intermediate Term Tax Deferred (Muni) in my Vanguard taxable. I
have looked at the NY specific one, and didn't feel that it was any better.

I've noted this in other posts, but I'm in my early 50s and keep roughly enough of those
bonds in taxable to carry me through to 59.5 years old (using my spending rate as a guide),
with the rest of my bonds to hit my AA in tax deferred. I view this as having two benefits:

1) Liquidity of something very stable and with limited tax implications very available.
This is sort of just mental accounting, but is the plan I settled on.

2) This also limits my taxable dividends each year such that at my high marginal tax rates
I'm not getting even more taxable events. (The so called tax drag.)

These are very much fine tunings to any portfolio.
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grabiner
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Re: Bonds in taxable

Post by grabiner »

theorist wrote: Fri Dec 04, 2020 11:55 pm
nydoc wrote: Fri Dec 04, 2020 10:41 pm Does anyone buy bonds in taxable account? If yes, which ones? All my bonds are in 401k.
Thanks.
Yes, I live in CA and am in a high tax bracket. At various times I have bought

Vanguard intermediate term tax exempt

Vanguard California intermediate term tax exempt

Vanguard California long term tax exempt

Right now I hold the first two. The advantage of the CA funds is that they are exempt from state tax as well; there may be similar funds for New York. However that needs to be balanced against the difference in yield to see if the state specific fund really yields more after taxes, and in any case, there is (at least slightly) more risk in holding bonds specific to one state — though all of these are high quality bond funds.
The difference in yield should be based on a difference in perceived risk, so it isn't fair to compare yields directly. Vanguard's CA muni fund currently yields less than its NY muni fund, which means that bond investors consider the CA bonds less risky than the NY bonds. If you move from NY to CA and switch from Vanguard's NY to CA fund, you should get a risk reduction which compensates for the lower yield.
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midareff
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Re: Bonds in taxable

Post by midareff »

BolderBoy wrote: Fri Dec 04, 2020 10:43 pm
nydoc wrote: Fri Dec 04, 2020 10:41 pmDoes anyone buy bonds in taxable account? If yes, which ones? All my bonds are in 401k.
Yes, Vanguard Intermediate Term Tax-Exempt.
Yes, Intermediate Term Tax-Exempt and Long Term Tax-Exempt in a 1:2 relationship. At the time I did my analysis that mix outperformed the tax-exempt index and didn't cost 25 basis points to buy.
ivgrivchuck
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Re: Bonds in taxable

Post by ivgrivchuck »

nydoc wrote: Fri Dec 04, 2020 10:41 pm Does anyone buy bonds in taxable account? If yes, which ones? All my bonds are in 401k.
Thanks.
I used to hold VTEB. But since I manage a mid-six figure portfolio with relatively aggressive stock allocation, I/EE-bonds are a better deal for me now.
44% VTI | 36% VXUS | 10% I-bonds | 10% EE-bonds
mortfree
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Re: Bonds in taxable

Post by mortfree »

I don’t understand bonds so I have Wellington (10k or so) in taxable and Wellesley in my 401k and Roth.

I’ll let those funds handle the bonds for me. Although obviously not the same as having VTI and BND. Or whatever bond investment.
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MrBobcat
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Re: Bonds in taxable

Post by MrBobcat »

nydoc wrote: Fri Dec 04, 2020 10:41 pm Does anyone buy bonds in taxable account? If yes, which ones? All my bonds are in 401k.
Thanks.
Soon when I run out of space in my SEP-IRA. I don't really want to put them into our roths.
Gnirk
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Re: Bonds in taxable

Post by Gnirk »

Because over 90% of our investments are in taxable, and because of our tax rate, we hold Vanguard Intermediate Tax Exempt Bond Fund in our taxable accounts and some Vanguard High yield tax exempt.
Bug
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Re: Bonds in taxable

Post by Bug »

Yes. Total bond market index, but I am in a low tax bracket
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gasman
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Re: Bonds in taxable

Post by gasman »

I bonds
EE Bonds
T bills/treasury money market fund.

At these rates muni risk reward and increasing maturities just don't seem appealing at all to me.
sambb
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Re: Bonds in taxable

Post by sambb »

intermed term tax exempt
UpperNwGuy
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Re: Bonds in taxable

Post by UpperNwGuy »

I hold the Vanguard Intermediate-Term Treasury Index Fund and the Vanguard Intermediate-Term Corporate Index Fund. It's essentially the same portfolio of bonds as the Vanguard Intermediate-Term Bond Index Fund, but by holding treasuries and corporates in separate funds, I can weight them differently than Vanguard does. I lean more heavily toward treasuries than does Vanguard.
Blue456
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Re: Bonds in taxable

Post by Blue456 »

nydoc wrote: Fri Dec 04, 2020 10:41 pm Does anyone buy bonds in taxable account? If yes, which ones? All my bonds are in 401k.
Thanks.
No. I hold cash.
chrisdds98
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Re: Bonds in taxable

Post by chrisdds98 »

TMF, TYD, and NTSX
tj
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Re: Bonds in taxable

Post by tj »

ivgrivchuck wrote: Sat Dec 05, 2020 6:04 pm
nydoc wrote: Fri Dec 04, 2020 10:41 pm Does anyone buy bonds in taxable account? If yes, which ones? All my bonds are in 401k.
Thanks.
I used to hold VTEB. But since I manage a mid-six figure portfolio with relatively aggressive stock allocation, I/EE-bonds are a better deal for me now.
if I understand your signature correctly, your entire bond portfolio is EE's and I's ? I've considered that. How long have you been building them up?
ivgrivchuck
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Re: Bonds in taxable

Post by ivgrivchuck »

tj wrote: Sat Dec 05, 2020 10:07 pm if I understand your signature correctly, your entire bond portfolio is EE's and I's ? I've considered that. How long have you been building them up?
Not too long. Mid-six figure portfolio, 20% in bonds, me & my spouse together can purchase bonds 45k per year. You can do the math, it doesn't take too long.

For someone with significantly bigger portfolio or higher bond allocation, I'd recommend supplementing it with some MYGAs.
44% VTI | 36% VXUS | 10% I-bonds | 10% EE-bonds
kimura king
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Re: Bonds in taxable

Post by kimura king »

Only S&P etf, an international index etf, and four stocks. Thought about adding a tax exempt muni bond in the taxable account to replace my money market account. FLMB was the bond fund I was looking at for the taxable account.
pasadena
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Re: Bonds in taxable

Post by pasadena »

Another vote for VWITX (Vanguard Intermediate-Term Tax-Exempt Fund) or VWIUX (Admiral shares) or FXNAX (Fidelity® U.S. Bond Index Fund) if your taxable account is with them.

When I was living in California, I also used VCAIX (Vanguard California Intermediate-Term Tax-Exempt Fund) for half of my taxable bonds.
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billthecat
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Re: Bonds in taxable

Post by billthecat »

Yes, because my tax-deferred accounts are not large enough to hold my entire desired bond allocation. I used SCHZ, Schwab's total bond.

I'm in CA but hold SCHZ because I intend to leave CA when I retire, which hopefully won't be too much longer.
We cannot direct the winds but we can adjust our sails.
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oncorhynchus
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Re: Bonds in taxable

Post by oncorhynchus »

I'm in both high state and federal tax brackets and with no mega-backdoor Roth available, run out of tax advantaged space quickly. I max out I and EE bond purchases each year, hold all F Fund in my TSP, and hold Vanguard Long Term Tax Exempt Fund Admiral shares (VWLUX) in my taxable account which I use if I need to rebalance.

o
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dmcmahon
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Re: Bonds in taxable

Post by dmcmahon »

gasman wrote: Sat Dec 05, 2020 9:20 pm I bonds
EE Bonds
T bills/treasury money market fund.

At these rates muni risk reward and increasing maturities just don't seem appealing at all to me.
Ditto. I own laddered treasuries and with yields close to zero, so are the taxes. A minor bonus is they’re exempt from state income tax. I’ll take my risk on the equity side, where it’s been rewarded - so far.
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