Investing Fundamentals

Tax Efficient Investing with Larry Ludwig

tax efficient investing
Table of Contents
  1. Show Notes
Table of Contents  
  1. Show Notes

You’re investing, great!  Now we can take it a step further and learn how to optimize your taxes while investing.  Larry Ludwig will explain the best tax efficient investing practices.

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The tax man gets enough of your hard earned bucks. Larry Ludwig from The Money Tree Investing Podcast will teach us how to optimize our investments for the biggest tax benefit.

Betterment Review aka An Epic Betterment Experiment

Betterment Review aka An Epic Betterment Experiment

Larry recommends eight steps to maximize your tax savings:

1.  401k up to your employer’s match.

2.  Traditional IRA

3.  401k post match.

4.  Roth IRA

5.  529 Savings Account if you plan to send a child or yourself to college.

6.  US I Savings Bonds, low yield but a good place to keep some emergency cash.

7.  MLP and Muni Bonds for higher net worth, more sophisticated investors.

8.  Taxable and Non Taxable Accounts, depending on your goal, buying a house, getting ready to retire, create a balance between taxable and tax deferred investments.

I get money back but I'm not exactly celebrating it.

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If you’re looking for the most simple option, funnel money into a Roth IRA.  If you are self employed, start a solo or SEP 401k.  All the more reason to start your own business.  It gives you so many more investing options than when you work for the man.

Tax forms will be going out in a few months so you still have some time to get that money into an account that will give you the most tax shelter.  Don’t overdo it though.  You can have so much in tax deferred accounts that you don’t have anything liquid for an emergency.

Show Notes

Tax Efficient Investing: Here’s a link to Larry’s post that outlines all the concepts talked about on the episode.

The Money Tree Investing Podcast:  A weekly interview podcast devoted to personal finance.

Betterment:  Sign up today for six months free investing.

HSA Accounts:  Explanations about age restriction.

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