In evaluating the costs of investing, you may find that asset location is just as important as asset allocation . “Asset location” refers to the account that your money is actually sitting in. Since the $750,000 that you’re asking about is currently in a 401(k), you’d want to first review the particulars of your plan. Does your plan give you the option of taking partial withdrawals, allowing you to use your savings as needed, or does it limit your withdrawal options to required minimum distributions (RMDs) ...

Core Insights - Many investors are unaware that taxes can significantly impact their long-term returns, potentially leading to actual losses despite portfolio growth [1] - Effective tax strategies, such as tax-loss harvesting and asset location, can help reduce tax burdens and enhance after-tax gains, making these strategies accessible to all investors, not just the wealthy [2][3] Tax-Loss Harvesting - Tax-loss harvesting is a strategy used by affluent investors to convert market volatility into financial advantages by selling investments at a loss to offset taxable gains [3][4] - Automating tax-loss harvesting can maximize benefits for investors, allowing for year-round implementation rather than just during tax season [4][5] Asset Location - Asset location involves strategically placing different types of investments in accounts that optimize tax efficiency, such as holding tax-inefficient investments in tax-deferred accounts like IRAs [6] - Investments with favorable tax treatment, such as index funds or ETFs, are better suited for taxable brokerage accounts, enhancing overall tax efficiency [6][7]