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Investing Specialists

Are You Holding Your Assets in the Right Types of Accounts?

Christine Benz

You've run the numbers and determined whether your spending rate is on track (or, if you're already retired, whether your spending rate is in the right ballpark). You've consulted reliable sources and come up with a logical stock/bond/cash mix given your particular situation. You've culled your retirement holdings down to a lean, high-conviction group.

Next up: asset location--identifying the right account type for each asset type. True, proper asset location won't make or break your retirement plan in the way that your savings/spending rate and your asset allocation will. But if you put some thought into which account types you're using to house which securities, you can both reduce the drag of taxes on your portfolio's return and also exert a higher level of control over taxable events--both worthy goals.