How to Actually Keep More of What You Earn
Taxes might not be the most exciting part of investing, but as I discussed on the recent Money Talk podcast episode, they’re absolutely crucial to long-term wealth building. After all, “it’s not what you make, it’s what you keep.” Whether you’re a young professional just getting started or aiming to refine your retirement portfolio, having a tax-savvy investment strategy puts more dollars in your pocket over time.
We kicked off the conversation with the foundations: why understanding the difference between traditional and Roth accounts could be a game-changer. Traditional IRAs and 401ks give you a tax break now, but you’ll owe ordinary income tax later—even if your account grows for decades. Roth IRAs, on the other hand, are the holy grail for many investors because that money grows tax-free—and can be withdrawn tax-free in retirement. Knowing when to use each, and for whom, is where a certified financial planner can add major value.
But we didn’t stop at retirement accounts. We dove into taxable investing accounts—often overlooked but incredibly flexible. These accounts are perfect for mid-term goals like a home purchase or building an emergency fund, and they open up smart strategies like capital gains harvesting (especially if you qualify for the 0% capital gains tax bracket). We also talked asset location—making sure you’re holding tax-inefficient investments in tax-advantaged buckets, and maximizing the triple-tax advantages offered by Health Savings Accounts (HSAs).
Some key tips from the episode:
Use ETFs in taxable accounts for lower capital gains distributions and easier tax management.
Don’t overlook the power of even small, consistent investing habits—$200/month invested early adds up dramatically thanks to compounding.
Prioritize tax planning, not just tax filing. Think ahead to shifting rules and how today’s account decisions could impact your future tax bill.
Bottom line: Tax-efficient investing is for everyone, not just the ultra-wealthy. Whether you’re trying to lower this year’s tax bill, optimize your 401k, put an HSA to work, or just want to invest with intention, working with a fiduciary financial advisor can help you build a smarter, more tax-savvy money strategy you can feel confident about.
Want to talk through your own investment accounts or need a personalized, practical tax plan? Reach out for a no-obligation conversation. Sometimes keeping more of what you earn is just a matter of knowing where (and how) to invest.