What does this mean?
To have the best investment results you must consider all costs of investing. Your investment strategy should start with your taxes. Paying or not paying taxes can have a big impact on your investments. Tax deferral strategies such as 401k, IRA, ROTH IRA, etc. help defer current income into retirement years when income would be lower.
We apply tax efficient process or “harvesting” tax losses, etc. We work with a CPA or accounting firm.
While taxes and investing tend to be two separate people or companies, each area directly affects the other. Typically, the investment advisor does not coordinate with the tax advisor and the tax advisor does not provide investment strategy ideas. All investment decisions have a tax implication in the long-run. When you don’t start with a tax strategy, you may be paying more taxes than needed. Your advisors’ ability to integrate an overall tax and investment strategy is what will ensure long term financial success.