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Typically it makes the most sense to have things that generate dividends and interest payments on a non-taxable account to reduce your current taxes.   You already lots in bonds to I would with put it into a REIT Index fund or an index fund that is heavy in dividend paying stocks.

It may typically make sense but it may not in this case. The OP says the IRA has $5k in it and he can't add to it. Therefore, the REIT may not be a good choice if the broker the OP is using does not reinvest dividends. The dividends would build up in a cash account and may earn a low interest rate. The OP should either switch to a broker that does reinvest dividends or invest in something that doesn't produce dividends.

IF
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