10 Ways to Increase Your After-Tax Investment Returns
Taxes are a drag. A drag on your investment return, that is. Dividends are taxable, interest income is taxable and capital gains are taxable. Your after-tax investment return – what you keep, not make, on your investment portfolio – could be lower than you think. And with tax rates probably trending higher, now is the time to get planning. After all, portfolio income when added to your other income can push you into a higher tax bracket, trigger an additional investment income tax, or cause Social Security benefits to be taxed.
Here to help are 10 fixes to help increase your after-tax investment return:
1. Use low-turnover mutual funds
Mutual funds report a “turnover ratio.” This is the rate at which a fund manager buys and sells stocks or turnovers a portfolio. The higher the turnover, the greater the likelihood for taxable capital gains
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