Okay, okay… This is It (I Promise)
I’ve probably bored you to tears over the past few blogs, but I can’t help trying to be more complete. (This is in response to some finfluencer posts I found that only give the sexy part of any story.)
Somewhat tangential to my recent Taxes Matter posts, I want to offer two more tax ideas for diversification, but first a word on Required Minimum Distributions (RMDs).
Do I Need a Diversified Portfolio? And Other Risk/Reward Questions
“Wide diversification is only required when investors do not understand what they are doing.”
These are strong words from Warren Buffet, the CEO of Berkshire Hathaway, which arguably is its own diversified investment. Buffet has been known to say that concentration builds wealth and diversification protects wealth; that diversification is a hedge for when you are not knowledgeable.
That said, what should you do with your nest egg: build wealth or protect it?
Taxes Matter In Retirement (Part II)
Last week, I discussed why tax diversification matters in retirement. In it, I described how we tend not to think of tax treatment in distribution as we build our wealth. Instead, we place most of our wealth in accounts that are taxable as income (IRAs, 401(k)s) and in our homes (equity.)
But in retirement, we may want to finesse how much income we show year-over-year in order to take advantage of the tax code; because having assets with different tax treatments (capital gains, Roth, deferred) provides more choices, which lead to (potentially) paying less tax out of your savings.
Taxes Matter In Retirement (Part I)
It’s Tax Day! Welcome back to the surface, all my CPA friends. Well done on this year’s efforts. Get all the extensions filed and head out on your well-earned spring vacations! When you come back, let’s do coffee.
As for the rest of us, we tend to think of taxes as a necessary evil, which of course, they are. It’s hard to love tax information. Now, before I lay some on you (tax love, that is) in honor of this auspicious annual event, I’d like to address something truly important in grammatical constructs. And while my reach is not far (yet), I will be gratified if just one person learns this and uses it properly going forward: