Tax-Smart Strategies for Maximizing Retirement Income with Paul Samuelson and Mark Hoffman

Nov 5, 2024

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Taxes are a major concern for both investors and advisors. As such, minimizing tax liability is a priority in wealth management. Asset location, a strategy that places assets in the most tax-efficient accounts, can significantly enhance a portfolio's overall efficiency. While this approach can be a multi-account exercise, having a modern portfolio management system equipped with tax-smart technology can streamline this process and effectively coordinate unified managed household accounts.

In this episode, Jack Sharry talks with LifeYield's Founder and Chief Investment Officer, Paul Samuelson, and CEO, Chairman, and Founder Mark Hoffman. Paul has written algorithms that power investment software for more than four decades. He’s spent the past 16+ years devising algorithms around minimizing taxes and maximizing retirement income, all part of a robust asset location process. Mark turns Paul's algorithms into industrial-strength software used by many of the largest financial institutions in the world.

They discuss asset location and tax-smart strategies to minimize tax liabilities and maximize retirement income.

In this episode:

[01:46] - Asset location explained
[03:05] - The evolution of holistic wealth management
[04:36] - What inspired Paul to help advisors produce better outcomes
[08:00] - Harnessing the potential of asset location
[11:50] - LifeYield's capacity to scale and operationalize asset location
[14:08] - The difference between single-account and multi-account tax-loss harvesting
[15:44] - The benefits of modern portfolio management systems
[17:29] - The model portfolio in wealth management
[18:50] - The importance of asset location to boomers
[22:35] - Key takeaways and final thoughts

Quotes

[04:08] - "Financial planning systems are one good way to look at multiple accounts. And then, to have the financial plan implemented, you really need to consider asset location." ~ Mark Hoffman

[06:56] - "Certain assets are likely to be more tax-inefficient, but they don't always land the way you would expect. So, for investors who happen to hold low turnover stock portfolios, you can effectively have quite tax-efficient equity investing as long as you're willing to pay great attention to sales of stock." ~ Paul Samuelson

[22:57] - "Asset location, placing the most tax-efficient assets in your taxable accounts and the least tax-efficient assets in the qualified accounts, raises the after-tax return of your portfolio. That means you'll get more balance, which can create more income. Asset location is the dominant form of tax alpha you'll get." ~ Mark Hoffman

[23:50] - "The real opportunity in looking at all the household assets is that you're going to be able to pick up some of the client accounts that have been unmanaged or very poorly managed. It's an opportunity for the advisors and a real service to the clients." ~ Paul Samuelson

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