Tax-Efficient Investing

Often overlooked, taxes can significantly impact your income and investment results, affecting the long-term values of your investment portfolios and estate.

Planning to manage the tax consequences of investment decisions efficiently can be an important factor in retaining more of the assets you worked hard to build. It can also significantly impact your current and future income and tax bill.

Areas of current concern may include:

  • Structuring your investment portfolio in the most tax-efficient manner.
  • Building your estate plan to transfer your wealth with tax efficiency.
  • Retaining more of your income after taxes.
  • Optimizing distributions from your retirement accounts.
  • Determining a draw-down strategy that factors in tax consequences.

Tax-Efficient Strategies

Coordinating with your tax advisor, we can help you implement tax-efficient investment strategies now and in the future to help reduce the likelihood of taxes becoming a burden, including:

  • Tax-Loss Harvesting – helps you plan when losses should be taken on your holdings to best offset income and other gains to your advantage for the tax year.
  • Tax-Lot Accounting Techniques – helps you determine which shares to liquidate, ultimately helping you to reduce taxes by managing capital gains and losses.
  • Legislation and Tax Code Education – gives you access to investor communications from our financial planning professionals that can help you stay abreast of any changes that could affect your assets and estate.
  • Qualified Retirement Plans – specifically for business owners, strategies to help reduce taxable income, increase tax-deferred retirement savings, or take advantage of tax-free Roth 401(k) options, if appropriate.

Tax-Efficient Investments

We can also recommend which tax-efficient investments suit your needs and goals. Some of the types of considerations we make when making recommendations to you include:

  • ETFs and Index Mutual Funds – have a passive-management style and low portfolio turnover and typically tend to be more tax-efficient than many actively managed portfolios, with lower management costs.
  • Tax-Managed Mutual Funds – aim to employ tax strategies within the fund to limit annual distributions, lowering their annual tax cost to their investors.
  • Municipal Bonds (Munis) – offer free income from federal and in some cases, state taxes.
  • Annuities – offer tax deferral opportunities outside retirement accounts for those who wish to save more efficiently.