Worried About Higher Taxes Under Biden? How to Adjust Your Investment Strategy Now

Many investors have various investment accounts—a 401k, a Roth IRA, and perhaps a brokerage account. They typically purchase the same investments in all of these accounts, or whichever is most convenient.

I spoke with a doctor recently who invested $10k into Tesla stock in 2018 and now those shares are worth $50k! This doctor bought his shares in a brokerage account, so the gain (profit) of $40k, in this case, would be taxable to him. However, if he held this investment in his Roth IRA, that growth would be tax-free. 

Again, right now investors are worried that capital gains taxes will increase under Biden for at least some investors. Here’s what can you do to prepare. Take inventory of the investments you hold and consider some proactive changes:

• • • Those investments that you expect to appreciate more aggressively in the future should go into Roth accounts as best you can fit them. 
    • Those investments that pay heavy dividends may be better held in your 401k rather than your brokerage where those dividends will be taxed.

Interview: Lauren Oschman

Lauren Oschman, CFP® is a financial advisor for some of the nation’s highest caliber physicians. She holds an economics degree from Vanderbilt University and completed her financial training at Emerson University. Along with these prestigious degrees, Oschman has over a decade of expertise in financial matters for high net worth individuals. 

Oschman delivers financial education programs to medical residents & fellows nationwide (Vanderbilt, Dartmouth, Rush, OrthoCarolina and many others), has built a $1 million revenue financial planning business, and co-founded Vestia Personal Wealth Advisors, and is an expert in helping physicians attain their financial goals—and has a niche passion for working with high-caliber female surgeons, and volunteers as a CFP® WIN (Women’s Initiative) Advocate to raise awareness about the profession for young women.

Her decade-long experience as an accomplished financial advisor and executive has led to her being a sought-after speaker for financial workshops throughout Alabama, Georgia—and Tennessee, where she has happily resided with her husband and two young children.