Treasuries in tax deferred acct.

[exoilman]

I realize that no tax advantage but still a good place to invest?

Thanks
Sam

[MrJedi]

Yes, no annual federal tax drag.

[dcabler]

I realize that no tax advantage but still a good place to invest?

Thanks
Sam

No year in/year out tax drag in a tax deferred account. Whether it's a tax advantage in the long run depends on your current tax situation vs. future tax situation.

Cheers.

[sycamore]

I realize that no tax advantage but still a good place to invest?

Thanks
Sam

Sure. It lets you defer taxes on the interest.

Curious why you might think it's not a good place?

[Freeadvice]

I have the same question. I’m considering rolling over my 401k of 90% equities so that I can place treasuries in there. Now that I’m 55 and the rates are up and my bracket is up, it may be a good time. Is it worth it since I would lose my back door Roth advantage? Or just do munis in taxable?

[sycamore]

I have the same question. I’m considering rolling over my 401k of 90% equities so that I can place treasuries in there. Now that I’m 55 and the rates are up and my bracket is up, it may be a good time. Is it worth it since I would lose my back door Roth advantage? Or just do munis in taxable?

There's no general rule to help answer this kind of question; you need to "run the numbers" for your specific situation to see what works best. Bogleheads can help with that but it requires you to post portfolio details per the Asking Portfolio Questions wiki article.

I would first suggest looking at any bond funds available in your 401k. Maybe there's a low-cost Treasury bond fund?

[exoilman]

I realize that no tax advantage but still a good place to invest?

Thanks
Sam

Sure. It lets you defer taxes on the interest.

Curious why you might think it's not a good place?

In taxable you get state and federal so thought was better served.

[muffins14]

I realize that no tax advantage but still a good place to invest?

Thanks
Sam

Sure. It lets you defer taxes on the interest.

Curious why you might think it's not a good place?

In taxable you get state and federal so thought was better served.

In taxable accounts, you still pay federal taxes on interest from treasury bonds

[exoilman]

I realize that no tax advantage but still a good place to invest?

Thanks
Sam

Sure. It lets you defer taxes on the interest.

Curious why you might think it's not a good place?

In taxable you get state and federal so thought was better served.

In taxable accounts, you still pay federal taxes on interest from treasury bonds

thank you.

[howard71]

I prefer keeping them in tax deferred accounts. All my LTT's are there and don't think I would ever put those in taxable. Could cost a couple of grand or more at tax time.

Sometimes I buy T-bills in the taxable investment account just because I'm overweight in stocks and don't want to buy any more.

[rgs92]

I prefer the Total Bond Market as per the 3-fund-portfolio approach. It is much easier when rebalancing without caring about taxable events. And it also provides diversity in the fixed income part of my portfolio. Individual bonds of any type lock in a rate for a while and are thus a bet on the direction of interest rates.

Also, retirement tools (Firecalc, cFireSim) use the total bond market as the main fixed income input.

There is room for some investment in a stable value fund in a 401k/403B (or something like TSP G) to take advantage of a higher short term rate with no risk to principal that is a restricted access investment not available to the general public.

[retiringwhen]

I realize that no tax advantage but still a good place to invest?

Thanks
Sam

I see you are a NJ Resident!

Actually, if you have the stomach for tracking your IRA income over the long-term, income from Treasuries is actually exempt from NJ income tax at the time the funds are distributed. I started a thread on how to track the income and report on the NJ 1040 earlier this year. This means you actually could get the tax benefit in the future IF you keep track of the exempt income AND you still live in NJ at the time of distribution.

I have converted almost all my bond holdings in my IRAs to TIPS and nominal Treasuries in part to take advantage of this odd rule. I am in the process of partially retiring now with a full retirement in the 1-3 years, so the exemption has real near-term benefits.

Here is the thread: viewtopic.php?t=393132