What is the best way to simplify my portfolio and avoid a high tax bill on short- and long-term capital gains?

I have several mutual fund holdings at four different institutions. These holdings are in taxable (non-IRA) accounts that I have invested in monthly for 30 years. I plan on retiring at the end of the year and want to simplify my holdings. I would like to combine all under one fund. What is the best way to simplify my portfolio and avoid a high tax bill on short- and long-term capital gains?

Financial Planning, Retirement, Asset Allocation, IRAs, Mutual Funds
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6 days ago

Minimal holding appraoches are an excellent solution for many folks. Nearly all of the management (rebalancing, tax loss selling, tactical moves) are pushed off to a prfoessional and all asset clases are held within one or two funds. Otherwise you might start engaging in mutual fund "horsepicking", incur trading costs through rebalancing, etc. I really like this low maintenance approach. 

Depending on what you want there are so many options. For ETFs, both Blackrock and iShares have good, low cost names that give worldwide equity exposure for a few basis points. You could pair one of those with an actively managed "core plus" bond fund that has the majority of holdings in investment grade bonds, with smaller allocations to high yield, floating rate, etc. Doubleline and PIMCO have good solutions there, along with many others. 

Unfortunately I can't give out specific ticker symbols, but for a well funded retirement a simple holding appraoch might look like this.

  • All world equity ETF - 50% (one holding)
  • Core Plus Bond Mutual Fund - 35% (one holding)
  • 15% - two or three holdings giving exposure to uncorreleated assets (Real estate, Commodities, Etc.)

Sounds like you're on the right track.

3 days ago
6 days ago