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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Saving in Austin on February 15, 2017, 06:36:45 PM

Title: Is it better to hold bonds (VFIDX) in a SEP or Roth IRA ?
Post by: Saving in Austin on February 15, 2017, 06:36:45 PM

Hoping to make the right decision regarding taxes.

This subject always confuses me.

Title: Re: Is it better to hold bonds (VFIDX) in a SEP or Roth IRA ?
Post by: Indexer 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.

Title: Re: Is it better to hold bonds (VFIDX) in a SEP or Roth IRA ?
Post by: Saving in Austin on February 15, 2017, 10:05:45 PM

Thank You.