[quote=kismetsdad]I have invested in Vanguard VCAIX for years and it has been consistent tax free 3.5%+ return. It is about 10% of liquid assets. The higher your tax bracket the more competitive it is with non-tax free investments. The fund has a large pool of bonds so any individual default (like Stockton or San Bernadino) doesn’t have much effect. The fund only buys intermediate term and holds to maturity so the bonds are redeemed at PAR so interest rate fluctuation isn’t a big problem. The Vanguard fund outperforms Fidelity and Schwab doesn’t even offer a product. [/quote]
That’s what I wanted to hear. Sounds like you’ve been putting money in here for some time, and that 3.5% tax free return is exactly what I was looking for..I’m on year 3 of this fund (well the admiral version if it), and was considering moving more in there.
A sign of me getting much older is when I start thing that a stable 3.5%-4% return is a good thing.
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If you are on Social Security the double tax-free income is actually considered income and renders some of the social security benefit from tax free to taxable. There is thus a tax implication for some investors. This is true for all investments though.
Vanguard also has low overhead!
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I have a long way to go before this. But can you explain what do you mean by this? Just curious.
