I think this is good practical advice and, for what it is worth, is very close to what I do. You can avoid all of the above nuanced questions about the state of the law by simply avoiding holding securities in a taxable account that are substantially identical to your 401(k) investments, and it generally is pretty easy to do so.Sometimes the question of what stock fund to hold comes from beginners on Bogleheads Reddit--especially those who have heard 100% S&P 500 or such super-abbreviated advice--so after this dive here into the details of wash sales, perhaps not lose sight that you could always prepare in advance:
Taxable: Total Stock and Total International Stock (for tax loss harvesting opportunities between them, and foreign tax credit), and Treasury or municipal bonds
Roth IRA: Total World Stock (indifference to the foreign tax credit) or LifeStrategy Growth, or a target-date fund
401(k): S&P 500 + Extended (or Mid+Small Cap), Developed Markets (or EAFE) + Emerging Markets, Total Bond (or Aggregate Bond) or corporate bond fund, Total International Bond or some variant thereof (nicely, many 401(k) plans split up index funds this way, or, just use a target-date fund)
Statistics: Posted by HootingSloth — Wed May 22, 2024 11:04 pm — Replies 53 — Views 3343