💰 Use a taxable account for retirement savings? | FinTips 🤑
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- Опубликовано: 14 окт 2024
- Today we're talking about the taxable account and how to use it for retirement investments. We'll focus on the tax consequences like long term and short term capital gains as well as when you get taxed as ordinary income. A taxable account can be a great addition to your retirement investment strategy after using all the tax advantaged accounts.
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Rebalance with dividend tip was a good one I haven’t learned yet. Thanks!
*GREAT VIDEO DUSTIN* | Yes, taxable accounts DO have a place in our investments, especially when you consider that you may want to access PRIOR TO turning age 55 1/2 or age 59 1/2. This video is very informative from a tax perspective since so many people have wrong assumptions! Great job Dustin! 👍🏻😎
Good video. I’ve recently been studying how taxes work in retirement. It would be cool if you made a video on the most tax efficient way in retirement to draw social security, take 401k, Roth IRA, and dividend income from the portfolio. I feel like the way we plan to draw money in retirement can greatly effect how we invest before retirement.
From my thoughts I'd first take from Roth because its already taxed (plus there's ways to use it early through ladder methods) then 401k then S.S (if you reach 70 before depleting Roth then S.S would be before 401k) then taxable brokerage accounts if you didn't use that to fund your life before retirement age.
Thanks for the clear explanation. Any chance you could help identify which ETFs are more advantageous in a taxable account? For instance, should we avoid dividend ETFs completely, to avoid taxation, or swallow the dividends as they come in favor of a more balanced portfolio in case of a recession? There is little to no information on this anywhere as far as I have seen. Most everyone only talks about Roth IRA investments.
Nice tip on rebalancing strategy. I was thinking just to stop putting money in the overweight ones and doubling up new capital in the thin ones. But stopping drip to do that along with new capital could make it quicker.
One point about bonds in a taxable account: A Municipal bond fund that includes bonds issued exclusively within your state can net you non-taxable dividends.
Thank you, this answered a lot of my questions.
More people should use taxable accounts after they have maxed out tax-protected accounts. They just need to educate themselves on a few ways to maximize tax savings.
Really good video, Dustin! Great summary. I love the Fin Tips, short and to the point. Thank you for taking the time to make these.
Finally a video that is presented by a Financial Advisor 👏…I swear 95% of the time, financial literacy videos here on RUclips mostly starts off as: “Hi I’m not a Financial advisor and this video is for entertainment purposes only🤦♂️…but I get it, with laws and rights for their own protection they have to say that however, my Man DUS here caught me when he said: “I’m a financial advisor”…I was all ears from there 🤜🤛👏
Thank you!!!!! We have maxed out all tax advantaged options, and we've been wondering what to do. I'm not scared of them anymore!
I think by double taxation, people mean that you pay tax on the income from your job that you then use to buy the stock. And then you pay capital gains later when you sell the stock. But with a retirement account you only pay tax one time.
EXCELLENT info as always. Thank you.
Very nice video. Wondering if you could explain tax loss harvesting. Then show us on your chalk board….whether losses can cancelled by gains even if they are long term or short term. I bet there are a lot of people facing this dilemma. *don’t forget the wash sale rule. Thanks again! 💋
Informative video sir.
Thanks Dustin great to go over the pros and cons.
Hi, you are very informative n I enjoy your channel. I am 57 n max out my roth for last 3 yes. Im new at this with the taxable account. I have 10 shares of fxaix n schd in taxable account. account
Q. thinking of adding voo n just continue with that instead of fxaix, is that ok or just keep adding to fxaix.
Also, do I put down a large sum like 5,000 n then continue each month with about 100 or 200?
Everyone I know dies real young. Can you make a video on how to invest for us who don't expect to make it to 60?
😂😂
Taxable account or Roth second, IMO, you may live longer than 60
Vegas lol
Pretty simple save and invest all you can as early in your career as possible.😊
Stop hanging out with young people and start hanging out with old people like me! There, problem solved. All jokes aside. Does your family history have a history of dying young? Are there then steps you can do to mitigate it.
Thanks for the great video! Unfortunately I have Vanguard Star Fund (VGSTX) & Bond fund in my Taxable account and now I know it's a BIG mistake to have them in taxable account. To correct it, I stopped reinvesting the dividends to use that money to invest in ETF. I was thinking transfer these funds to non-taxable account like Roth-IRA but would result in selling & rebuying which would cause tax consequences. Any suggestions?
Great video 👍. Can short term capital losses be offset with LONG TERM capital gains?
You are the best. Can you do a vedio on asset allocations?
Wow thank you that help me lots
Dustin, taxable account vs a 1.5% yearly asset fee 401k with no match? High earning couple in California.
What if I took a loss of $11k but I was only holding the stock for less than 30 days? Is it not considered a wash ?
Next time you could mention that you can hold something like "Your State" Tax Exempt bond fund in your taxable account to avoid paying taxes on the earned interest. Then use the formula Exempt Fund Yield / (1-(Fed Marginal Tax Rate + State Tax Rate)) = the Yield a taxable bond needs to exceed in order for the taxable bond to make sense in the taxable account.
Great vid!
Dustin what are your opinions about a tax free municipal bond fund as an option to help avoid state or federal taxes!??
I'm a bit late to the party here but I'll take a shot with a question. If I have a Roth IRA and a taxable account can I put my qualified distributions from my taxable account into my Roth IRA and have those gains taxed as long term capital gains rather than as earned income?
There are no qualified distributions from the taxable account. Taxable events are after a sale of a security or receipt of dividends. If you're investing in non efficient mutual funds (active high turnover) instead of ETFs the mutual fund can send you capital gains without you selling any shares
Is there any tool or platform to know when a dividend is qualified and when is not? Thanks for all the helpful info 👍
Alejandro Di Michele you have to look on the stock itself. Yahoo finance is good for this.
It will tell you on your 1099-DIV form. Most REITs are not qualified dividends but can issues dividends that are a return of capital.
I was wondering this all the time
I have a long running IRA. If I wanted to find a tax account from my IRA for that ‘one time’ is there a limit? Could I close out the IRA and push it all in my new tax account?
am I hear this correctly that you wanted to transfer IRA money to a taxable account? if so you are much, much better off by transfer IRA money to ROTH IRA.
So I am in the fence here. My employer mat hes up to 6% on a 401k or roth 401k whichever i want. Also I am thinking on investing in a personal taxable account. But not sure which way to go
Invest up to the match in the Roth 401k. Then invest in a Roth IRA. This is all assuming you are out of debt and have an emergency fund.
ROTH actually is much better choice
Cool video 😊
So my work place has a retirement plan which I put money in a 457 so If I made 80,000 for 2019 and I already added 2,000 to a traditional ira. What would happen?
I know it’s late, but they are separate. You can contribute $6k to the IRA and $19,500 to the 457.
@@johngriffith6266 but I'm saying as far reducing my taxable income
Yg Bodybuilder It would lower your taxable income. I believe you’ll need to fill out a form to report your contributions.
Capital gains only apply when you sell right?
Right
Yes
In a taxable account, index funds get taxed capital gains once or twice a year on earnings [b/c of turnover in the fund] if your salary is over $40K per year. ETFs almost never, only when you sell and pull it out. Vanguard index funds act like ETF's [until '23] and don't get taxed cap gains once or twice a year on cap gains b/c they have an equilavent ETF to the index fund.. Fidelity and others might do the same deal in '23 when that patent expires for Vanguard.
@@1Mannco Thanks so much for the info! The $40k you mentioned, thats gains for just the one fund, overall gains across index funds, or other metric of income? Could you point me to any reference material that mentions this $40k rule? I would be very interested to read about it.
The Vanguard patent expiration is not something I had heard of before, thanks for the heads up!
Yes he never said this applies when you sell. Only talked about owing based on the time you hold.
What about an index fund?
Just look to see what you’re all investing in. My index funds are all stocks
So if I'm broke and my regular tax bracket is really low, like 12%, do I pay 12% or does it go up to 15%?
If your regular tax bracket is 12% then you shouldn’t have to pay any long term capital gains tax. Not sure about short term. Just keep your invests for over a year and don’t worry about it
Good stuff
I’ve always been curious, do trading fees factor in before capital gains? For instance, if I make $100.00 gain but pay $10.00 in trading fees, am I taxed on $90?
Eric Juli you are taxed $100. Call it the cost of doing business. :)
I take the risk my money, yet the government can tax my capital gains lol. I wish we can get a refund for all the money the government mismanages and puts her further in debt with that atrocious deficit.
THIS VIDEO IS GOD
I have been searching for this info for a while now. Very well explained. For a couple that Married filling jointly, is it better to have a joint account or individual accounts?
First comment
Great lesson! Although I don’t know if I agree with rebalancing individual stocks by investing dividend earnings into my losers. Wouldn’t it be better to water your flowers and trim your weeds, so to speak?
Mike well if you are going to be rebalancing your portfolio anyways, he’s making the argument that it’s better and possibly more tax effective to use the dividends to help rebalance. Not sure if I agree there depending on tax situation but I’m pretty sure that’s what’s going on here
I gotcha.
This is worst advice