These two sources may be of interest to you:[. . .]specifically fidelitys index target date fund [. . .]
I know common knowledge states that this isn't the most optimal thing to do tax wise but i was wondering if anyone had more insight into how bad it really would be.
1. Lessons From Vanguard Target-Date’s Capital Gains Surprise (Morningstar 2022)
The article starts out discussing the specifics of a big capital gains distribution that occurred with the Vanguard target date series (and generated a lot of discussion in the media), but then goes on to discuss ***broader*** reasons why the author thinks "Target-date funds are best kept where most of them are: in a tax-deferred account."
I highly recommend reading this Morningstar article.
2. The Vanguard target date "capital gains surprise" mentioned in the Morningstar article seems vastly more widely remembered than the Fidelity (index) target date "capital gains surprise" that occurred a couple of years earlier. However, since you are asking specifically about the Fidelity Index target date series, it is worth knowing that Fidelity is not immune to such things. Here's a link to a boglehead's discussion on Fidelity's version:
Why fidelity mutual funds such as ffopx [Fidelity Freedom Index 2050] declined more than 10% today? (bogleheads.org, December 2019)
Answer: big capital gains distribution.
However ... I'll repeat that I highly recommend the Morningstar article I listed above. Any big capital gains distribution generates more yelps of pain, but the more mundane slow tax inefficiencies mentioned in that Morningstar article could well end up being the bigger problem for many people.
Statistics: Posted by cas — Tue Apr 30, 2024 6:10 am — Replies 4 — Views 414