Here is a great source of financial advice. There are a bunch of dense readings to get through, but I learned some interesting points:
- Tax-deferred investments should be weighted (or more precisely, deweighted) by the expected tax rate upon withdrawal.
- It might actually be better to buy a bond mutual fund rather than individual bonds. The Admiral-class bond funds from Vanguard seem to have great pricing structure: their returns are within a few basis points of recently auctioned Treasury notes.
- Keeping bonds in tax-deferred accounts is desirable, given that all income is taxed at normal rates. Of course, this is offset by the fact that real-estate investments distribute even more income as dividends.
- Non-Vanguard ETFs may not be as tax-efficient as VIPERs. Redemptions of VIPER Creation Units enable Vanguard funds can purge portfolios of low-cost-basis stocks; redemptions of normal share classes enable them to realize capital losses. In addition, because Vanguard funds have held their stocks for a while, their dividend distributions all qualify for capital-gains treatment.