A question about tax-advantaged accounts

On April 27, 2019, from F. B. L….DDS, FAGD, Idaho

Question:

I just signed up for membership today and as I looked through your postings the “core” accounts were tax advantaged. What does that mean?  Does that mean they are in a retirement account?  I am not yet retired but at age 71 am forced to take minimum distributions and they are accumulating outside the retirement account. Is there a better way? Thanks

Monday Morning Millionaire Program Answer:

Broadly speaking, the expression “tax-advantaged” can refer to investments, accounts or plans which offer tax benefits.  These are either exempt from taxation or tax-deferred allowing investors to pay taxes later, sometimes decades later. There are many examples both in the United States and Canada.

Canadian tax-advantaged accounts and US tax-advantaged accounts go by different names but are similar. There is no better place for any investment assuming that the Government allows the particular security in any particular tax-advantaged account. Over an investing lifetime, this can amount to hundreds of thousands of dollars compared to investing outside such an account. We hope that this describes your investing history.

You would need less than one hour of your accountant’s time to focus on the best way for you to proceed. Unless your accountant has many dentist-clients, you might want to buy an hour’s time from an accountant who does in order to confirm your accountant’s suggestions.

It is almost a certainty that their views will be similar.

 

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Dr. Milan Somborac

The Monday Morning Millionaire Program supports do-it-yourself (DIY) investors which I have been for over 50 years. About my team and me

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