I have a Roth IRA, 401K both maxed out every year. I also have an individual investment account. All with Vanguard.
In total, I have about 55% in VTI, 35% in VXUS, and 20% in BND, BNDX
They are pretty randomly distributed throughout my three portfolios because I didn't know about tax drag until pretty recently. As I understand it, I should be putting my bonds in tax efficient accounts, and stocks in my individual.
Bear with me because I don't think I actually understand how gains are taxed in individual investment accounts. I wish to rebalance by selling all of my bond indexes from my individual and put the money in stock indexes instead. If I am selling the bonds, am I paying tax on the gains immediately? Or only when I withdraw the cash? How is this calculated anyway? Would love some reading materials so I understand.
Or should I leave the BND I have in my individual and from now on only put new money invested into stock indexes?
Any other suggestions on optimal tax efficiency?