No. Adding 500 index to taxable does not fix the problem. In fact it makes the problem worse by giving you yet a 3rd fund in taxable that can cause a wash sale with another account.1. Regarding the wash rule: I did consider this and my approach was that I turned off reinvesting dividends. I lump sum load my HSA and backdoor Roth each January so those are a one time purchase. The only active contributions would be to my Roth 401k each month so I (perhaps naively) thought it wouldn't apply frequently enough. Would it make sense/be easier to just add VOO to my taxable instead?
If you are purchasing VTI in your 401k each month, there is no way you can ever sell VTI in taxable at a loss without incurring a wash sale (assuming 401ks can be involved in wash sales at all...a never ending argument and nobody knows the answer).
You can deal with wash sales or you can avoid them. The choice is yours. You can avoid them by not reinvesting dividends and watching all other purchases, but I think at some point, many people have an opps. That's OK - you can deal with it if you must.
One way to permanently avoid a wash sale without having to even check is to never hold the same fund in other accounts that you hold in taxable.
Overall, I think your plan is fine. In your tax bracket, I think you will catch some flak for using Roth 401k, but your reasoning makes sense to me considering the large amount of pre-tax profit sharing combined with Her pre-tax 401k contribution.
I understand your wife's suggestion to use a financial planner. However, you do not seem to need one and that is fine.
Statistics: Posted by retiredjg — Tue Jun 18, 2024 7:56 am