Tax Allocation – An Investment Strategy

Most individuals use the same investment strategy (pro-rata), ignoring how the accounts are taxed.


Minimize taxes and maximize wealth


Match investment types with each account type for the highest tax efficiency.

  • Taxed – Annually
  • Inv. – Value Equities
  • Strategy – Lower capital gains tax rate as well as potentially eliminate the tax with tax loss harvesting.
  • Taxed – On withdrawal at the ordinary tax rate.
  • Inv. – Taxable Bonds
  • Strategy – interest on bonds is taxable at ordinary rates. Rates are the same and it allows you to postpone the tax.
  • Taxed – TaxFree.
  • Inv. – Growth Equities
  • Strategy – Over time these investments historically have had the highest gains. Match with a tax-free account and eliminate the tax.


Implementing this strategy of minimizing taxes can create wealth over time. It is not what you earn but what you keep that makes a difference!