Right Place, Right Time

Right Place, Right Time. Combining your asset allocation strategy with a smart asset location strategy.

Sometimes its not just what investments you have, but where you have them. We call this your asset location strategy.

Proper asset location puts your wealth in the right types of accounts, whether they are Traditional IRAs, Roth IRAs, 401k, non-qualified accounts or others, based on your investment strategy and when you need to access those funds.

For example, if you plan on retiring early, you don’t want to fall prey to the IRS early withdrawal tax, which assesses a 10% fee for withdrawals from your 401k before age 59.5. To solve that, your financial plan should have the needed resources in a standard, non-qualified account that is not subject to this extra expense.

Similarly, you may want to place investments with the highest return potential in a Roth IRA, where the growth would be sheltered from future tax.

The goal with asset location is simply to meld your asset allocation strategy with the appropriate vehicle. All too often, investors — even professional planners — will treat each account type the same, spreading their asset allocation equally across all accounts. Usually, this is a bad move.

Proper asset location will distribute your investments across taxable accounts, tax-exempt accounts and tax-deferred accounts for maximum efficiency and effectiveness.

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