The type of funds isn't necessarily that important for your Roth and 401k in terms of taxability as only contributions or distributions will be taxed depending on which one of these you're talking about. However, the taxable account will have more sensitivities towards the type of returns your recieve whether it be through dividends or capital appreciation. I'll defer to poodlebrain for the specific tax implications as I hate accounting and taxes.

If you would like information on asset allocation I'd be much more helpful. What's your current allocation look like? You can categorize it any way you want, I'll get a pretty good idea regardless.

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Posted by RickAstley

Reno, Nevada

Member since May 2011

2004 posts

Posted on 9/18/13 at 10:33 am to BennyAndTheInkJets

I am practically ~100% in stocks right now. On Vanguard I am:
Vanguard Dividend Appreciation VDAIX - 26.12%
Vanguard Total Stock Market VTSMX - 56.07%
Vanguard Target Retirement 2055 VFFVX - 17.81%
Which comes out to 98.2% stocks, 1.8% bonds

My 401k through John Hancock is:
Total Stock Market Index Fund - 71.23%
500 Index Fund - 28.77%

I am reaching the end of the first year of my investing career with a 30-40 year timeline before I see retirement happening. Yes this is weighted very heavily in stocks, though if it all went to $0 today I would not be living on ramen. I still maintain a sustainable emergency fund and a savings account which I have not included in the numbers above. Simply due to that money being used for expenses while my current paychecks are being used to dollar cost average my contributions in my 401k and my taxable account through Vanguard.

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