Asset Location Optimization: The Power of the Tax-Free Account
Asset Allocation has been part of the investment professional’s asset management strategy for decades. More recently, a considerable amount of attention has been focused on a natural extension of that approach: Asset Location. The life insurance community has known for years that life insurance’s unique value proposition positions it as an analog to things like Roth IRAs that are invested after tax, but the client will not pay taxes on any distributions from these assets. Of course, life insurance has a significant advantage: The income-based limitations that can prevent clients from utilizing Roth IRAs don’t exist for life insurance. We can show you how to implement this strategy to maximum benefit by allocating assets to the proper asset location based on their inherent tax efficiency, delivering meaningful “tax alpha” that can make a massive difference in client outcomes.
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The contents of this document should not be considered as tax or legal advice. Any information or guidance provided is solely for educational or informational purposes and should not be relied upon as a substitute for professional advice. It is always recommended to consult with a licensed financial or legal advisor for specific guidance related to your individual situation.