To me the decision is a function of the size of the taxable account. When larger, it can easily handle six months of emergency spending. And when larger, you start to get annoyed and the dividends and interest that higher yielding assets throw off and get taxed at marginal rates.
I understand the logic, but at the end of the day you really only have what’s invested in taxable as liquid. I understand selling/buying in tax-deferred to keep your AA in check. rather grow my funds according to the risk I’m willing to accept for that specific purpose, and keep all funds liquid. So what if you pay a little bit in taxes.
To swing a house with the method, you'd need a pretty large taxable account that could still fund the house in a sharp downturn. My taxable account is fine with that but my tax deferred couldn't handle it (result of being a long term expat ...).
So it's a tool that can work in some circumstances and not in others. Use it if it works for you.
Statistics: Posted by typical.investor — Sun Sep 01, 2024 12:01 am — Replies 44 — Views 2588