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Put the Right Investments in the Right Accounts!

If you are holding individual stocks in a retirement account as well as in a regular non-retirement account, it is important to be aware of having the correct stock in the right account.

For example, stocks paying high dividends should go into your retirement account, since those dividends would otherwise be taxed right away at the regular income tax rate. If they were in your regular account, they would lose the benefit of tax-free growth.

Also, aggressive growth stocks should largely be left in the regular account for two reasons. One, they usually don’t pay big dividends and two, stocks sold in the regular account are taxed at the capital-gains rate while those sold in a retirement account are taxed at the higher income tax rate.

Always remember that in no matter what account you hold your equity investments they should be well diversified so as not to expose yourself to too a high a risk.

As always these tips are general in nature, and are intended to give you some ideas and guidelines as to things you should be aware of.

Please don’t take any actions without consulting us, or other appropriate professionals!