Tax Diversification

Tax Diversification

Are you familiar with strategies that are available to help you spread your investments across taxable, tax-deferred and tax-free accounts?

The subject of “diversification” is often discussed when topics such as mutual funds, stocks, bonds, real estate and other investment classes are on the table. However, what about tax diversification?

The primary reason for developing a tax diversification strategy is it’s impossible to know precisely what your tax rate will be throughout your retirement years, especially if retirement is still many years away for you.

Putting all of your investments in only one type of account is unlikely to be the most tax-efficient strategy. Tax diversification can help protect your investments and minimize risk from significant tax rate changes.

Talk to your personal tax professional or distribution specialist about this to make sure your investments are set up the way you want!


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