Thanks so much for the thorough replies. Really helpful.
Re: selling the target date funds, I’m trying to fully understand the analysis there.
Like if I sell now and have to pay cap gains tax NOW on all of the appreciation, is that necessary less than the costs of continuing to hold the target date funds (the cost of which as I understand going forward are the funds’ annual cap gains and dividends, which will get worse as it glides to more bonds).
Given the time value of money of whatever I have to pay in taxes (let’s call it 50k) now, I guess I’m asking if it’s a given that the tax inefficiencies of holding those funds will be worse than the tax bill now if I invested that in the market instead. Especially if my cap gains rate might be lower in retirement considering lack of income?
Is there an analysis to be done there or am I missing something that makes it sort of automatic that I need to get out no matter what.
Thanks again!
Re: selling the target date funds, I’m trying to fully understand the analysis there.
Like if I sell now and have to pay cap gains tax NOW on all of the appreciation, is that necessary less than the costs of continuing to hold the target date funds (the cost of which as I understand going forward are the funds’ annual cap gains and dividends, which will get worse as it glides to more bonds).
Given the time value of money of whatever I have to pay in taxes (let’s call it 50k) now, I guess I’m asking if it’s a given that the tax inefficiencies of holding those funds will be worse than the tax bill now if I invested that in the market instead. Especially if my cap gains rate might be lower in retirement considering lack of income?
Is there an analysis to be done there or am I missing something that makes it sort of automatic that I need to get out no matter what.
Thanks again!
Statistics: Posted by Targetdated — Sun Dec 17, 2023 11:38 pm