Financial Planning: A Strategic Approach to Managing Taxes
In a recent Financial Planning article, Jefferson National’s Chief Investment and Research Officer Tom Quinn introduces a solution to the topic many clients dread to discuss, taxes.
Taxes can be clients’ biggest expense—as much as 50 % in taxes a year, when federal, state and local taxes are combined. Taxes are not only a costly out-of-pocket expense, but also a drain on performance of their portfolios—especially for the high-net-worth clients.
However, there are solutions to the tax burdens. As Tom Quinn’s recent Investing Insights study shows, advisors can implement a more strategic approach to managing taxes by using asset location. It is a proven strategy to mitigate the impact of taxes and increase returns 100-200 bps per year—without increasing risk. As Mr. Quinn notes, “To maximize tax deferral to its fullest potential, asset location is a strategy that is simple, predictable and reliable.”
His article goes on to describe which clients can benefit most, as well as outlining a systematic approach to harness the benefits of asset location—and the full power of tax deferral.
Read more on how to maximize tax deferral by using asset location, here.