It’s a good move imo to move your accounts from Wealthfront and Morgan Stanley AUM to a low-cost brokerage. Have you considered Fidelity (or Schwab) over Vanguard? They will also likely pay you a bonus and reimburse the closing/transfer fees charged by Morgan Stanley.
Before you initiate the account transfers at the receiving brokerage, print or download your MS cost basis records to make sure the cost basis transfers properly as your MS online account may be locked once you initiate the transfer.
With only $42k in gains in the Taxable account’s 100s of stock positions, consider selling everything soon all at once as the taxes are relatively insignificant to move into low-cost diversified funds/ETFs. Exchange all the stocks in the inherited IRA too as there are no tax consequences. You don’t need an advisor to sell everything and move to a 3-fund portfolio or a target date fund. This BH wiki page discussed tax-efficient fund/ETF placement across your portfolio’s various account types (Taxable, Roth, tax deferred):
https://www.bogleheads.org/wiki/Tax-eff ... _placement
Does your 401k offer a mega backdoor Roth? If yes, maximize it too (assuming your 401k is low-cost). Use your Taxable account for living expenses if your paycheck becomes too low after the higher 401k withholdings. The 401k Roth account will grow tax free whereas your Taxable account’s income/gains are subject to tax.
Distributing from the inherited IRA as you posted will likely result in higher distributions than RMDs in years 1-9 but does avoid a large distribution in year 10 to empty the account. Perhaps for this year only take the lower RMD if you will have $42k in gains from the Taxable account clean-up.
With a larger portfolio, the need for a separate emergency fund diminishes imo. A year in cash is a lot but sometimes it means sleeping well. You can buy Treasuries with some of the cash in a brokerage account which may have a higher yield for now over a money market fund or HYSA. Treasuries are state-tax exempt so your tax equivalent yield is higher than the investment rate.
Before you initiate the account transfers at the receiving brokerage, print or download your MS cost basis records to make sure the cost basis transfers properly as your MS online account may be locked once you initiate the transfer.
With only $42k in gains in the Taxable account’s 100s of stock positions, consider selling everything soon all at once as the taxes are relatively insignificant to move into low-cost diversified funds/ETFs. Exchange all the stocks in the inherited IRA too as there are no tax consequences. You don’t need an advisor to sell everything and move to a 3-fund portfolio or a target date fund. This BH wiki page discussed tax-efficient fund/ETF placement across your portfolio’s various account types (Taxable, Roth, tax deferred):
https://www.bogleheads.org/wiki/Tax-eff ... _placement
Does your 401k offer a mega backdoor Roth? If yes, maximize it too (assuming your 401k is low-cost). Use your Taxable account for living expenses if your paycheck becomes too low after the higher 401k withholdings. The 401k Roth account will grow tax free whereas your Taxable account’s income/gains are subject to tax.
Distributing from the inherited IRA as you posted will likely result in higher distributions than RMDs in years 1-9 but does avoid a large distribution in year 10 to empty the account. Perhaps for this year only take the lower RMD if you will have $42k in gains from the Taxable account clean-up.
With a larger portfolio, the need for a separate emergency fund diminishes imo. A year in cash is a lot but sometimes it means sleeping well. You can buy Treasuries with some of the cash in a brokerage account which may have a higher yield for now over a money market fund or HYSA. Treasuries are state-tax exempt so your tax equivalent yield is higher than the investment rate.
Statistics: Posted by HomeStretch — Wed Apr 03, 2024 2:12 am — Replies 1 — Views 227