Investors can boost their after-tax returns by pairing assets with taxable accounts or tax-advantaged retirement accounts like 401(k) plans and IRAs.
Vanguard Group settled with the SEC on Friday over allegations tied to its target-date funds and investor taxes.This strategy pairs tax-inefficient assets like many bonds and actively managed mutual funds with tax-advantaged account types like 401 plans and individual retirement accounts.manager, agreed to pay the sum for alleged"misleading statements" over the tax consequences of reducing the asset minimum for a low-cost version of its Target Retirement Funds.
Only 28% of Americans who planned to buy a home in 2024 actually did—young buyers feel ‘trapped between a rock and a hard place'Those who hold"tax inefficient" assets — like many bond funds, actively managed funds and target-date funds — in a taxable account may get hit with a big unwelcome tax bill in any given year, experts said.
While most middle-class savers predominantly invest in retirement accounts, in which tax efficiency is a"non-issue," there are certain non-retirement goals — perhaps saving for a down payment on a house a few years down the road — for which taxable accounts make more sense, Benz said.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Vanguard Fined $106 Million for Target Date Fund DisclosuresThe Securities and Exchange Commission (SEC) penalized Vanguard for failing to adequately disclose the potential impact of changes to minimum investment requirements for its institutional target date funds. The SEC found that the changes led to large taxable distributions for remaining investors in the retail share class, resulting in a financial disadvantage.
Read more »
Vanguard Fined $106 Million for Target Date Fund Disclosure FailuresAsset management giant Vanguard has been fined over $100 million by the Securities and Exchange Commission (SEC) for failing to disclose the potential impact of changes to minimum investment requirements for its target date funds. The SEC found that Vanguard's 2020 decision to lower the minimum investment requirement for institutional target date funds led to redemptions and taxable distributions for remaining shareholders in the retail versions.
Read more »
Vanguard to Pay $106 Million to Settle SEC Charges Over Target Date Fund DisclosureVanguard Group Inc. agreed to pay $106.41 million to settle Securities and Exchange Commission (SEC) charges related to insufficient disclosures about the impact of changes to its target date investment funds. The SEC alleges that Vanguard's 2020 decision to lower the minimum investment requirement for its institutional target date funds triggered redemptions from retail investors, leading to unexpected capital gains distributions and tax liabilities.
Read more »
Roth 401(k)s Gain Popularity, But Many Workers Don't Take AdvantageThe number of 401(k) plans offering Roth savings options has surged in recent years, but most workers still opt for traditional pretax contributions. Financial experts say the best choice depends on your current and future tax situation.
Read more »
Roth 401(k) Savings Gaining PopularityThe number of 401(k) plans offering Roth savings options has increased significantly over the past decade, rising to 93% in 2023. While Roth contributions are on the rise, pretax contributions remain more popular. Financial advisors suggest considering your current and future tax brackets when choosing between Roth and pretax contributions.
Read more »
IRS Increases 401(k) and Retirement Plan Contribution Limits for 2025The Internal Revenue Service (IRS) has raised the contribution limits for 401(k) and other retirement plans for the 2025 tax year. This increase is designed to help individuals save more for retirement in the face of inflation.
Read more »