The Money with Katie Show Investing *Outside* Your Retirement Accounts
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Aug 30, 2023 Explore the benefits of taxable investing, including favorable tax treatment for capital gains. Discover the significance of taxable brokerage accounts for high earners and the tax breaks from the IRS. Learn about the tax implications of reinvesting earnings and a personal Robinhood horror story. Understand investing rules and tax implications, including taxes on dividends and interest. Consider different options for investing outside of retirement accounts, such as Betterment, Vanguard, and M1 Finance.
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Taxable Accounts Offer Flexibility
- Taxable brokerage accounts offer flexible access to your money anytime without the 59 and a half age restriction.
- Their capital gains are taxed favorably at rates of 0%, 15%, or 20% compared to ordinary income tax rates.
Prioritize Taxable Accounts Wisely
- Use taxable brokerage accounts after maxing out retirement options or for flexible goals before age 59 and a half.
- These accounts work well for overflow savings, mid-term goals, or early retirement bridge funds.
Use Taxable Accounts for Early Retirement
- For early retirement, use taxable accounts as bridge funds before accessing qualified accounts.
- Withdraw from taxable accounts up to the 0% capital gains tax bracket alongside Roth conversions.