Most investors focus on how to avoid capital gains taxes - but far fewer think about when it actually makes sense to realize them. In certain low-income years, intentionally selling investments at a gain can reduce future tax bills and lock in long-term tax savings. This strategy, known as tax gain harvesting, is often overlooked but can be especially powerful in the years leading up to or just after retirement. Executive Summary Unlike tax loss harvesting, which realizes los

Tax Loss Harvesting Explained The end of the year is an excellent time to look at tax moves you can make to keep more of your hard-earned money in your pocket. After all, it’s not about what you make, but what you keep over your lifetime - especially when it comes to taxes. An impactful but often technical strategy for investing and taxes is tax loss harvesting. While it’s important not to let the tax tail wag the dog, it’s helpful to understand this strategy - especially if

When conducting Roth conversions as part of your financial strategy, many people unknowingly encounter the pro rata rule, which can result in an unexpected tax bill. In this article, we break down what the pro rata rule is, how it works, and ways you can mitigate the tax impact when conducting Roth conversions. Executive summary The pro rata rule affects Roth conversions when your traditional IRA has both pre-tax and after-tax contributions. You can’t convert only after-tax (

The Mega Backdoor Roth IRA (MBDR for short) takes the benefits of the Backdoor Roth IRA strategy we’ve discussed and magnifies them. If you haven’t already, check out our content on the Backdoor Roth IRA - it provides the foundation for this article. Executive Summary The Mega Backdoor Roth IRA (MBDR) lets high earners put more money into Roth accounts than standard limits allow. It works by making after-tax contributions to your 401(k), then converting them to a Roth Require

Let’s talk about a strategy that can help high earners maximize tax-free retirement growth: the Backdoor Roth IRA. Even if your income prevents direct Roth IRA contributions, this approach lets you take advantage of Roth IRA benefits. In this article, we discuss how it works, who qualifies, and what to watch out for. Executive Summary Roth IRAs allow tax-free growth and withdrawals in retirement, with no required minimum distributions (RMDs). High earners may be ineligible to

Roth conversions are a hot topic in the world of finance. In this article, I’ll break down what they are, who they may (or may not) make sense for, and how to approach them in your financial planning. It’s important to first understand the basics of Roth IRAs, so if you haven’t, I suggest reading this article first. Executive Summary Roth conversions let you pay taxes now in exchange for tax-free withdrawals later. They work best when your current tax rates are lower than wh

Roth is a powerful type of qualified retirement account that, when utilized, can help you save for retirement, provide greater tax diversification when investing, and create more tax-free wealth over the long term for you and your heirs. Executive Summary Roth IRA accounts offer tax-free growth and withdrawals in retirement. Contributions are made with after-tax dollars, allowing tax-free earnings. Withdrawals of contributions are always penalty- and tax-free. Earnings withdr