“Householding” is about getting a complete view of all your accounts and holdings. But what’s a view without action? “Smart-householding” takes this view a step further by coordinating all these accounts so they work together to minimize your investment taxes and maximize your after-tax rate of return. This is done through a technique called asset location optimization. By taking all the assets within your household and distributing them to the correct accounts, you’ll avoid paying unnecessary investment taxes. While so many investors have tried to “beat the markets” in their quest to achieve investment goals, they’ve learned the hard way this approach doesn’t work. Aggregating and coordinating accounts can reduce costs, manage risk consistent with your comfort level and increase your portfolio’s overall tax-efficiency. This approach has helped investors save as much as 33% on taxes over time according to a study by Ernst and Young. Investments taxes are complicated to explain, so we use tools that benchmark the overall tax-efficiency of a portfolio and show you the steps being taken to decrease your investment taxes and increase your after-tax rate of return. After all, it’s not about how much money you make— it’s about how much you get to keep.
What Is Smart Householding
June 16, 2021