Asset Location

Oddly, this technique might involve selling a bond position in the taxable account for a small capital gain, and buying that exact same position in an IRA in order to keep the portfolio in balance.

A dollar saved on taxes is worth more than an extra dollar of income because the extra dollar of income is in itself taxable.

Exact asset location depends on the percentage of a portfolio held in each of the three types of accounts as well as the percentage of the portfolio which is to be allocated to each selected sector. But the boost in after-tax returns is well worth the effort.

Good financial planners can be worth their weight in gold in helping clients build a tax-efficient portfolio.

Here are some additional tax planning resources regarding choosing the appropriate investment vehicles.

It can be useful to maintain a grid where all of the available asset classes are arranged in order, by tax efficiency and potential return based on time horizon, so clients can clearly see when and where tax-deferral can offer the greatest benefits.

There is a distinction between existing high capital gains exposure in a mutual fund verses future capital gains you expose yourself to.

To build real wealth, you need specific wealth management tools.Most families have less than half of the accounts they really need, and young newlyweds often only have a checking account.

No one approaches financial planning with the goal of paying more taxes. Tax management, like all financial planning, is based on the premise that small changes made over time can achieve big goals.

There are significant advantages to using different investment vehicles in different types of accounts.

There is an art to selecting the right investment vehicles for individual portfolios.

Keeping expenses low helps keep your return high.

A good investment advisor will tailor the investments to the specific characteristics of the investor’s situation.