Reply to Vanguard Target Date funds (in taxable accounts) --- WHAT IS GOING ON?

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Reply to "Vanguard Target Date funds (in taxable accounts) --- WHAT IS GOING ON?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]
Thank you.  I appreciate the explanation.  I obviously made some bad choices, investing in November and into the retirement fund.  So, if I sell now, this will show as a capital loss on next year's tax statement?  Since this is a retirement fund (vs. regular mutual fund) am I not allowed to simply convert to the ETF?  I need to sell and then re-purchase?  Thanks.  I'm wondering if I should move it all out of Vanguard after this.[/quote]

To be fair to you, it's not November in every single fund in the world--it's just been December dividends/cap gains at Vanguard for as long as I can remember.

If you sell now and take a loss, you will have a loss you can report against capital gains on next year's taxes.

It's a reasonable question about ETFs. The fact that the fund is labeled "retirement" would have no impact on in any direction. (Maybe like you, I invested in it for the asset allocation and the ease, not specifically because I plan to use the money in retirement.) The issue is that there is no Vanguard ETF equivalent to convert this to. So you would need to sell and repurchase.

FWIW, in similar shoes, I am leaving the money in the Total Retirement fund alone (because in my case it would cement a gain I don't want to pay taxes on now, and I think Vanguard is very unlikely to ever do something like this again). But going forward, I'll put new money in ETFs. Because "impossible" is better than "very unlikely."

The real question is: if you pull it from Vanguard, then where do you put it? And Fidelity has great ultra-low fees on a range of index funds, but there are other things I like about them less, and in the end I don't think the grass is that much greener.  [/quote]

Thanks again. I will think it over and I appreciate your insights. [/quote]

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