Author Topic: Is it better to hold bonds (VFIDX) in a SEP or Roth IRA ?  (Read 747 times)

Saving in Austin

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Is it better to hold bonds (VFIDX) in a SEP or Roth IRA ?
« on: February 15, 2017, 06:36:45 PM »
Hoping to make the right decision regarding taxes.

This subject always confuses me.

Indexer

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Re: Is it better to hold bonds (VFIDX) in a SEP or Roth IRA ?
« Reply #1 on: February 15, 2017, 07:23:54 PM »
Answer: SEP

Full Logic: You want to avoid bonds in a taxable account because bond income is taxed at ordinary income rates where stock dividends are taxed at a lower rate. Now, between pre-tax(SEP) and Roth the logic goes like this, the Roth never gets taxed again so you want your highest growth investment in the Roth.

Saving in Austin

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Re: Is it better to hold bonds (VFIDX) in a SEP or Roth IRA ?
« Reply #2 on: February 15, 2017, 10:05:45 PM »
Thank You.