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Why Let Taxes Eat Away at Your Investment Returns?

Why Let Taxes Eat Away at Your Investment Returns?

February 23, 2021
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The person who first said “Don’t put off until tomorrow what you can do today,” didn’t understand the benefits of tax-deferred investing. This option allows you to defer paying taxes on investment returns until retirement – when your income tax rate may be lower – while jumpstarting your overall performance today by keeping the principal amount intact so it grows via compound interest.

How dramatic a difference can the combination of compound interest and tax-deferred growth make? I’ll let the numbers do the talking. The attached flyer from Franklin Templeton, Being Tax Wise, offers a vivid illustration of the impact it can have on investment results over time. It also provides information on factors affecting investment choices.

Take a look. You might be surprised by how much growth you can achieve with these simple benefits allowed in retirement accounts. If you have any questions about your retirement accounts or how to take better advantage of compound interest and tax deferrals, let’s connect.

(Side note... tax season also means gathering all of your documents needed and getting them in one place to make filing your taxes as easy as possible. We thought it would be helpful to provide our Year-End Checklist to assist as well as refer you to our Tax Resources page for important dates, publications, and tax forms you may need as well. Let us know if there is anything we can help with along the way.)