Personal Investments • Re: Roth vs. Taxable for bonds at current yield

Then how do you justify bonds in Roth vs taxable?

Tax efficiency.

Bond Interest Income = Ordinary Income Tax Rate of 10% to 20+%

Stock Index Fund (90+% qualified dividend) = Long term capital gain tax rate of 0%

KlangFool

But that depends on the relative yield of stocks and bonds, for those outside the 0% LTCG bracket at least.. If bonds return 0.1% and stocks 20% it may be better to put bonds in taxable.

To OP, I agree in general. My calculations based on what I think are reasonable assumptions about return and taxation indicate that it makes sense to put stocks in taxable. But you can make your own assessment based on your situation.

Statistics: Posted by AnEngineer — Wed Jan 08, 2025 12:44 pm

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