Wealth Management

Tax Deferred Accounts

These are like the superheroes of the investment world, such as traditional IRAs, 401(k)s or Annuities*, allow individuals to contribute pre-tax income, which reduces their taxable income for the year. It's like a magical tax haven where your money can grow without Uncle Sam taking a slice. Just remember, when you eventually withdraw the funds, taxes will come knocking at your door, so it's important to plan accordingly.

*Annuities may not allow contributions to be tax deductible unless made into an IRA

Tax-Free Accounts

These are the unicorns of the financial realm, offering the magical ability to grow your investments completely tax-free, provided certain provisions are met. It's like finding a pot of gold at the end of a rainbow, only without the leprechaun. Examples of tax-free accounts include Roth IRAs, Roth 401(k)s or Health Savings Accounts (HSAs). Contributions to these accounts are made with after-tax income, meaning they do not provide immediate tax benefits. However, the investments within these accounts grow tax-free, and qualified withdrawals in retirement are not subject to income tax. So, if you're looking to shield your investments from the clutches of the taxman, tax-free accounts are the way to go.

Taxable Accounts

Taxable accounts are like the reliable sidekicks, always there to support your financial goals. While you may have to pay taxes on the earnings generated within these accounts, they lack the tax-deferred and tax-free advantages of the previous accounts, they offer flexibility and liquidity that can be valuable in certain situations. Examples of taxable accounts include individual brokerage accounts or managed accounts and do not offer any specific tax advantages. Investments within taxable accounts are subject to capital gains tax when sold, based on the holding period and the individual's tax bracket. Plus, they give you the opportunity to practice your tax management skills.