Make sure you have stopped any automatic dividend reinvestment in the taxable account.
In general, I would avoid selling off the funds in the taxable account to avoid taxable gains. If you want to rebalance there and want to sell off some positions, I would only sell up to the point where it would put her into a new tax bracket, both in marginal and in capital gains.
You mentioned that she has to take RMDs from two IRA accounts. Unless I'm mistaken (which happens a lot) you treat those IRAs as once account for RMD reasons. So you don't have to take an RMD from each, but need to take the total required RMD from either or both. This would give you some more flexibility.
You lumped together the BAGIX, PRGSX, and AFMBX. BAGIX is a US bond fund, DGRW is a stock fund, PRGSX is world large growth equity fund, and AMFBX is a world balanced fund.
You didn't mention what asset allocation you were interested in using. ie 50/50 stocks/bonds, or 60/40, etc...
If you haven't yet, take a look at https://www.bogleheads.org/wiki/Tax-eff ... _placement.
Your Mom's financial situation and how much risk she could manage would determine what asset allocation you would be looking for. In general, even bad financial managers seem to get that about right so maybe her current AA is just fine. However, if it was me, I'd tend to keep the fixed income in the IRAs and put the equities in the taxable account as much as possible. Changing things in the IRA is easy, it is the taxable that is more difficult. In the taxable, I'd be tempted to get or the BAGIX and AMFBX first to reduce your bonds in the taxable. If you like the current asset allocation then you move equity positions in the IRAs to bonds to get the balance you want.
Again, I think for your Mom, taxes may be more of problem than a high ER so I'd be careful about selling things off unless those bond fund have any losses that you use.
Others are much more knowledgeable than I so pay attention to them, rather than me.
In general, I would avoid selling off the funds in the taxable account to avoid taxable gains. If you want to rebalance there and want to sell off some positions, I would only sell up to the point where it would put her into a new tax bracket, both in marginal and in capital gains.
You mentioned that she has to take RMDs from two IRA accounts. Unless I'm mistaken (which happens a lot) you treat those IRAs as once account for RMD reasons. So you don't have to take an RMD from each, but need to take the total required RMD from either or both. This would give you some more flexibility.
You lumped together the BAGIX, PRGSX, and AFMBX. BAGIX is a US bond fund, DGRW is a stock fund, PRGSX is world large growth equity fund, and AMFBX is a world balanced fund.
You didn't mention what asset allocation you were interested in using. ie 50/50 stocks/bonds, or 60/40, etc...
If you haven't yet, take a look at https://www.bogleheads.org/wiki/Tax-eff ... _placement.
Your Mom's financial situation and how much risk she could manage would determine what asset allocation you would be looking for. In general, even bad financial managers seem to get that about right so maybe her current AA is just fine. However, if it was me, I'd tend to keep the fixed income in the IRAs and put the equities in the taxable account as much as possible. Changing things in the IRA is easy, it is the taxable that is more difficult. In the taxable, I'd be tempted to get or the BAGIX and AMFBX first to reduce your bonds in the taxable. If you like the current asset allocation then you move equity positions in the IRAs to bonds to get the balance you want.
Again, I think for your Mom, taxes may be more of problem than a high ER so I'd be careful about selling things off unless those bond fund have any losses that you use.
Others are much more knowledgeable than I so pay attention to them, rather than me.
Statistics: Posted by WeakOldGuy — Wed Feb 28, 2024 3:05 pm — Replies 5 — Views 170