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How to Be Tax Efficient With Your Investments

Tax efficient investing involves strategies to help reduce the impact of taxes. Investments have three tax flavors: taxable, tax-deferred and tax-exempt.

Tax efficient investing involves strategies to help reduce the impact of taxes. Investments have three tax flavors: taxable, tax-deferred and tax-exempt.

Types of Investments

Taxable investments requires gains to be paid as they are earned each year. These include investments like CDs and money market funds. Tax-deferred gains remain sheltered from taxes until withdrawn for retirement at age 59½ like 401(k)s or IRAs. Tax-exempt gains are not taxable either by federal or state taxes. To determine the tax effect of your investments, you must know which tax bracket you’re in and if capital gains rules apply.

How to Plan

The highest investment income minus the lowest taxes due is your investment goal. So focus on placing fully taxable investments in tax-deferred accounts. Don’t make the common mistake of putting investments that have tax benefits into an IRA. You will lose those tax benefits since all distributions from traditional IRAs are 100% taxable.

Let us help you make tax efficient investments in your portfolio.

Get Support from a Professional While Choosing Your Life Insurance
It’s important to have answers to these questions to help guide your decision-making process, but don’t feel as though you need to find a policy on your own. At Goheen Insurance, we work hard to provide custom solutions for our high net-worth clients, whether you’re choosing a plan for the first time or looking to audit your current life insurance policy. Contact us today to schedule a consultation and get started!

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SHAWN GOHEEN

Meet Shawn Goheen, the heart and soul behind Goheen Insurance. Since the early ’90s, Shawn has been more than just a financial advisor; he has been a trusted confidant to high-net-worth individuals. His journey has led him to build strong connections with over 15 specialty lenders and insurance carriers, and relationships with 20+ banks, giving him a rare edge in navigating the often-complex financial world with ease and transparency.

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