Tax-Efficient Investing: Top Strategies | Morgan Stanley

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1 Source: “Global Investment Committee Special Report: Tax Efficiency: Getting to What You Need By Keeping More of What You Earn,” Morgan Stanley Wealth Management, Mar 3, 2022

2 By using the strategy of withdrawal sequencing, the value-added is approximately 0.5% of equivalent after-tax return. Note that these annual returns would compound to very large numbers over the long investment horizons of many financial goals. In the case of withdrawal sequencing, the difference in returns in the case study is equivalent to nearly a 50% difference in final wealth accumulation. This strategy would be recommended for investors who (1) Have adequate savings relative to spending needs (2) Have a high marginal tax rate and (3) Have sources of low-tax distributions with which to smooth income. Investment liquidations to support retirement spending sequenced in order to increase tax efficiency. Withdrawals from taxable accounts come…

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