If your investment plan includes taxable bonds (Treasuries, corporate issues, mortgage-backed securities), they should be held inside a tax-deferred retirement account such as an IRA or a 401(k).

Suppose, for example, you have $100,000 in an IRA and $100,000 in a taxable account. Assume your asset allocation is divided 50-50, between stocks and taxable bonds. You might follow this strategy:

* hold the bonds inside your IRA, where the tax on the interest income will be deferred. You won’t have to pay that tax until you withdraw money from your IRA.

* hold your stocks in the taxable account, to take advantage of low tax rates on dividends. As long as you don’t take gains, you would owe little or no tax each year.

On the other hand, if you invest in municipal bonds, they should be held in your taxable account, to get the advantages tax-exempt interest.