Jeff Sommer, in his New York Times article, discusses how retirement investments that are fine in tax-sheltered accounts can generate big headaches without protection. His article, “For Taxes, Where You Hold Your Investments Really Matters”, begins as follows:
Tax bills are bad enough when you know they are coming. When they are unexpected and large, and come from what seemed like a safe and reliable place, they are infuriating.
That’s a rough summary of the effect of the big bills that some investors face because they hold retirement funds run by Vanguard and a handful of other fund companies in taxable accounts.
This tax problem hasn’t arisen for people who hold these so-called target date funds in tax-sheltered accounts — workplace retirement accounts like 401(k)s, or I.R.A.s. But for investors holding target date funds in ordinary, taxable accounts, it’s a different story.
To see the full article, click: “For Taxes, Where You Hold Your Investments Really Matters”
Posted by Mallory Wentz, Associate Editor, Wealth Strategies Journal.