Tax-advantaged investing is very good for most people at most times
A previous article, “The Solution – ONLY follow financial strategies that are scientific, passive, diversified, savings focused, risk controlled, low cost, and tax efficient,” suggested that individuals are much better off with a well-considered financial viewpoint. A stable set of financial beliefs can help you to keep focused and on track throughout your life. This follow-up article discusses the value of tax-advantaged investing and how VeriPlan can model personal lifecycle taxes to improve decision making.
You should understand the specific potential economic benefits of tax-advantaged investing within the context of your particular projected lifecycle financial affairs and tax situation.
You should invest in tax-advantaged investment vehicles, when you are more likely to gain a net long-term after-tax benefit. For the majority of people, this will be most of the time.
How VeriPlan Can Help:
VeriPlan has extensively automated the projection and analysis of your tax-advantaged investments across your lifecycle. Giving full control to you, VeriPlan’s projections incorporate a detailed lifecycle model of your family’s federal, state, and local personal income taxes plus your other taxes, such as Social Security, Medicare, and property taxes. (See: VeriPlan helps you to decide what your lifetime tax-advantaged and tax-deferred investment strategy should be)
VeriPlan differentiates your projected assets by their taxability status using three account classifications: 1) regular taxable accounts, 2) traditional tax-deferred accounts, and 3) Roth ‘never-taxed after contribution’ accounts. VeriPlan enables you to control automatically how much of your future earned income and of your employer’s potential contributions would be deposited into your taxable and tax-advantaged accounts, including traditional and Roth IRAs, 401k, and other plans. (See: Traditional versus Roth tax-advantaged plan contributions)
VeriPlan automatically applies taxes on asset distributions and withdrawals, as appropriate, depending upon whether your assets are subject to current taxation, future taxation, or no taxation. In addition, VeriPlan automatically projects asset withdrawals from your tax-advantaged asset accounts in retirement to meet your projected living expenses and to conform to tax rules regarding mandatory withdrawals from traditional tax-deferred accounts.
Because VeriPlan instantly develops for you projections that incorporate a customized personal tax model, you can use it to compare the lifecycle economic impacts of different tax avoidance strategies. For an example of a tax-related decision that you cannot make without such a robust model of your lifecycle financial affairs, see this discussion of the factors that influence your decision whether to make current contributions to Roth or traditional tax-advantaged accounts: Factors that tend to favor Roth tax-advantaged plan contributions (Part 1 of 2) and Factors that tend to favor Roth tax-advantaged plan contributions (Part 2 of 2).
VeriPlan Is Simply The
Best Financial Planning Software
You Can Buy!
Only $57 for a license for ALL your household PCs
… with Free Shipping of the CD within the USA
Full 30-Day, 100% Money Back Guarantee — No Questions Asked
No Support Contract Required
No Need To Buy Upgrades, Since All Parameters Are User-Changeable
VeriPlan is a Great Product, a Great Deal,
and a Great Help with Your Personal Financial Planning.
Thank You Very Much for Your Order!
Note: We mail your VeriPlan CD on the next business day after PayPal has notified us of your order. When your order ships, we will send a shipment notification email to you using the email address supplied by PayPal. VeriPlan is shipped via the USPS, and deliveries typically take 3 to 10 days to arrive.
Click here to find out more about this Personal Finance Tool
Tags: tax benefit
Personal Financial Planning
- How Investment Securities Are Valued – Snapshots in Time (
Snapshots in time - How investment securities are valued
Every securities market transaction requires a buyer and seller with differing viewpoints.
Markets can operate, because there are differences between investors in their assessments of the intrinsic value and risk of securities.
Current investment values vary in the eyes of the many beholders of investment market securities. Knowledgeable participants [...])
- Publish your blog news articles on traditional media center and newspaper websites (
An easy way to publish and syndicate your best news articles on some of the big news and media websites
Web content is more plentiful that grains of sand on the beach. However, really good and newsworthy web content is much more scarce. The cyberspace audience is discerning, but it takes time to attract them, and [...])
- Fund Authority Scores for Stock ETFs and Mutual Funds – Historical investment performance (
Fund Authority Scores rate stock mutual funds and ETFs on the most important economic factors affecting long term diversified equity investment fund performance. This article explains how historical fund performance is calculated.
<<-- Go to Part 1
Go to Part 3 -->>
Part 1 of this article discussed direct and hidden investment costs, the most heavily weighted factors [...])
- Risk-Free Investment Money Is Fantasy Money (
For Individual Investors Risk-Free Investment Money Is Fantasy Money
Securities with low investment risk and high investment returns are just fantasies.
No "risk-free" investment money is consistently and reliably available to individuals. Luck dominates skill in the securities markets. Clever investment selection is vastly over-hyped, and only the promoters tend to benefit. On average over long periods, [...])
- Most Individual Investors Are Poor Personal Portfolio Managers (Most individual investors are poor investment portfolio managers
Investors more easily understand investment costs that are directly measurable, such as fees deducted on investment statements. However, many investors ignore or are unaware of the “opportunity costs” of their sub-optimal investment behaviors. Opportunity costs are usually much more difficult to measure directly, but these investment costs can [...])
- American Funds – Capital World Growth and Income Fund – Class A Shares (CWGIX) warrant a +2 Fund Authority Score (Fund Authority Scores rate mutual funds and exchange traded funds (ETFs) on the most important economic factors that influence individual investors' net long term diversified investment fund performance. The Skilled Investor developed the Fund Authority Score system to provide individual investors with concise and objective summaries of mutual funds and ETFs for comparisons within investment [...])
- Screening Index Mutual Funds with IndexUniverse.com (Screening index mutual funds on-line with IndexUniverse.com
In this article, The Skilled Investor discusses how to screen index mutual funds on-line. This article focuses on using the free index mutual fund screener and database available at IndexUniverse.com.
We also discuss how to apply our seven scientifically based mutual fund screening criteria.
In a previous article, The Skilled Investor [...])
- Pay Lower Expenses To Get Higher Investment Returns – Part 2 (
Pay lower investment expenses to get higher investment returns
While financial services industry sales people tell you that you need to pay more to get more, the correct answer is the opposite.
Excessive investment costs are a plague on your personal financial planning. Excessive investment expenses are one of the most significant barriers to lifelong family financial [...])
- Avoid Very Large Actively Managed Mutual Funds (
Avoid very large actively managed mutual funds
Big actively managed mutual fund portfolio positions and higher percentage ownership of any company’s bonds or common stock are not good things for actively managed mutual funds. Nor, are these big positions and high percentages good for you.
Large portfolio size constrains how efficiently an actively managed mutual fund can [...])
- Savings Rates for Renters and Investment Cost Reductions (Pre-retirement savings rates for renters - with and without investment cost improvements
Improving on Fran and Fred's lifetime financial plan through lower investment costs
Fran and Fred Frugal, both age 30, are a married working couple with $100,000 in combined annual earned income. They want to understand how valuable different personal finance strategies could be to their [...])
- 2006 and 2007 Personal Income Tax Rates for the 50 States and DC (
2006 and 2007 personal income tax rates for the 50 states and D.C.
The Skilled Investor has made available for downloading a spreadsheet that contains graduated personal income tax rates and other personal income tax rate information for the 50 states and the District of Columbia.
If you want to know about specific U.S. state personal graduated [...])
- Searching for Superior Investment Fund Managers is a Waste of Your Time (
Searching for superior investment fund managers is a waste of your money and time
A previous article, “The Solution - ONLY follow financial strategies that are scientific, passive, diversified, savings focused, risk controlled, low cost, and tax efficient,” suggested that individuals are much better off with a well-considered financial viewpoint. A stable set of financial beliefs [...])
- Screening Mutual Funds On-Line with Morningstar.com (
Screening mutual funds on-line with Morningstar.com
Summary: In this article, The Skilled Investor discusses how to screen mutual funds on-line using our seven scientifically based mutual fund screening criteria. This article focuses on using the free mutual fund screener and database available at Morningstar.com.
In a previous article, The Skilled Investor has discussed minimum requirements [...])
- Schwab S&P 500 Index Fund – Select Shares (SWPIX) achieve a +8 Fund Authority Score (Fund Authority Scores rate mutual funds and exchange traded funds (ETFs) on the most important economic factors that influence individual investors' net long term diversified investment fund performance. The Skilled Investor developed the Fund Authority Score system to provide individual investors with concise, objective, and realistic summaries of mutual funds and ETFs for comparisons within [...])
- The John Bogle Blog and His Financial Article About ETFs (John C. Bogle's Blog and his article about ETFs
This article is a heads-up to people interested in investment blogs and personal finance blogs.
John C. Bogle, the founder of The Vanguard Group, Inc., has a blog called The Bogle eBlog. (If you are wondering about "eBlog," it is an anagram of Bogle.) Mr. Bogle just posted [...])