Cash: $ 15.40
Joined: 08 Sep 2016
Location: Mansfield, MA
Originally posted by oldguy
They say if you can do 2% or more better in your taxable account,
Usually, you can calculate it . Say that company A sells both taxable & tax-free bonds. They may have to pay 7% to sell the taxables and 5% to sell their taxfree. The factor is 7/5. So for $1000 5% the 'net' is $50. At 7%, the gross is $70, so if your marginal tax is less than $20 (28%) you would choose the taxable bond.
Well I didn't mean the choice of taxable vs. tax-free bond, I meant that I read an article stating that if you can make 2% better annually in your taxable account than in your 401k, you should just fund the 401k to the matching minimum. I did actually run the numbers and confirm that.