When Should You Save in a Taxable Account?
Asset location matters, but taxable accounts can be the way to go.
Note: This article is part of Morningstar's November 2013 Investor Starter Kit special report. An earlier version of this article appeared Feb. 27, 2013.
Even newbie investors are probably somewhat knowledgeable about the importance of investing heavily in tax-sheltered vehicles--IRAs and company-retirement plans. Taking advantage of tax-deferred compounding--or even tax-free compounding, in the case of Roth vehicles--is one of the easiest ways for investors to improve their bottom lines.