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Episode #620 - Year-End Planning: Tax Loss Harvesting
Roger: Welcome to the show dedicated to helping you not just survive retirement, but to have the confidence to lean in and rock it. My name is Roger Whitney. Welcome to the show. Today we're going to start a month-long series on year end planning. Each week we're going to talk about a planning technique that you might want to consider in your retirement planning that has to be done before the end of the year. Now, they may not have a place or not, but they're a good checklist of. Okay, maybe I should think about that just to see if there's an opportunity that you can take advantage of. We generally know of these things, but we don't think about them. It's always good to get a reminder at the right time. Today we're going to talk about tax loss, harvesting and the rules around that. Next week we're going to talk about annual gifting limits. And each week we'll hit something new. In addition to that, throughout the month we'll be answering a number of your questions. We're starting to get more audio questions so we're putting those in fast pass mode. So we'll make sure we'll have one of those each week before we get started.
ROGER SHARES THAT HE RECENTLY FINISHED GEORGE ORWELL’S 1984, HIS FIRST IN A NEW HOBBY OF COLLECTING WORKS BY CLASSIC AUTHORS.
Roger: I'm excited to say that I finished my first book in this new hobby I have, I guess, of purchasing great authors and buying nicer sets of their books. And I finished one of George Orwell's books, 1984. Now you probably read that in high school. I don't know, I didn't. I've never read a George Orwell book. I'm going to read his book Animal Farm next. Never read that either. It was very prophetic. Is that the word? It was. There's definitely a lot of things that you can apply to how language is used and doublespeak and all the themes that sometimes we see in the mainstream media. You can see that. Interestingly though, I think in the introduction they talked that he described himself as a democratic socialist. Didn't know that. I thought that was interesting. One connection I made, and perhaps this is sort of loose, but if you took the themes of the book, they reminded me a little bit of One Flew over the Cuckoo's Nest, which is a totally different kind of book. But the themes of conformity and individualism played a little bit throughout that book as well. I read that when we talk or when I talked about starting to buy, buying some of these authors and all their work in like every man's library is generally the publisher of the books which are these really nice quality books. Many of you sent emails with recommendations of books to add to that collection and I hadn't responded yet. So I wanted to let you know that I've received them, I've read them, and we're going to create a little resource that we'll share in the Noodle of all the collective suggestions that all of you sent in. So I appreciate that. I'm excited. It's building this huge list making reading default is something I want to get back to because I sort of fell out of that. Now, before we get started, this podcast is really just the beginning. Be sure to sign up for the Noodle. That's our weekly email where we dig deeper with coaching, insights, and curated resources. And it's also where you have a direct line to me and the team. You hit reply that comes right to my inbox. So you can sign up for that at thenoodle.me or at rogerwhitney.com, and that way you can join the conversation outside of the podcast. But that said, let's get to today's topic on the basics of tax lost harvesting.
RETIREMENT TOOLKIT
ROGER BREAKS DOWN THE BASICS OF TAX LOSS HARVESTING, EXPLAINING CAPITAL GAINS, THE DIFFERENCE BETWEEN SHORT-TERM AND LONG-TERM GAINS, AND HOW THEY IMPACT YEAR-END RETIREMENT PLANNING.
Roger: In today's retirement toolkit, we're going to talk about the year end planning technique called tax loss harvesting. So to talk about tax loss harvesting, we need to take a moment and talk about capital gains. So what is a capital gain? A capital gain is essentially when you own an investment and you sell it at a later date and you make money. You make profit because it went up in price and appreciated. That is what a capital gain is. And there are two types of capital gains. There are short term capital gains. That means that you purchased an investment and within one year you sold it at a profit. That's called short term capital gains. And those are taxed at your tax rate. Then there is a second type of capital gain. That is if you buy an investment and you hold it longer than a year, you qualify for special tax treatment. And rather than pay tax on the gain at your tax rate, you pay what's called long term capital gains taxes. And that can be anywhere from 0 to 20% depending on how your income plays out. So those are what capital gains are. So what is tax loss harvesting? Well, in the tax year that you realize gains, those will be reported on your taxes and you'll owe taxes based on your holding period and where you fall on the long term capital gains structure. So let's just build out an example here. Let's assume five years ago you bought a mutual fund, we'll call it ABC Mutual Fund, and you purchased it for $100,000, that was your investment. Now you've held it for three years. And earlier this year, 2025, you sold it for $300,000 because you needed the money to buy a house or do something. So when you sold that, you got your $300,000, your profit or your capital gain was $200,000. And because you held it longer than a year, that would apply to long term capital gain from a tax rate perspective. So when you do your taxes, in 2025, in this example or for this tax year, if we assume you're in the 15% long term capital gain tax bracket, because it goes from zero to 2015 is one of the brackets, you would have to pay $30,000 in long term capital gains tax. But the IRS says if you also realize losses in the same year because you purchased an investment and it went down in value and then you sold it, you can offset all of the gains that you've realized with all, the losses that you realize. So let's build out this example a little bit more. So we, we did that with ABC. Let's say we owned XYZ Investment, and we purchased that two years ago at $100,000, and now it's only worth $50,000. And you decide to sell that in the same tax year as you took that big profit, which means you would realize a long term loss of $50,000. So now when you do your taxes, rather than show the $200,000 gain, you're going to show the $150,000 long term gain because you offset 50,000 of that with the other investment that you sold to realize the loss. So you're allowed to do that unlimited. So if you have a zillion dollars in gains and you sell some other investments where you have a zillion dollars in losses, the net effect is zero. That is how capital gains are accounted for year by year. And then they segment them between short term capital gains and long term capital gains. So tax loss harvesting is simply the act of proactively selling an investment to use the loss to offset gains. So as an example, to continue, well, to continue with this example, let's say we had that XYZ investment. We didn't particularly want to sell it because we want to own it. We want to be in that investment space. Let's assume it's a bond investment long term, but it has this $50,000 loss and you realize I have this gain I, just have for this year. And, well, it sure would be nice to be able to Offset some of that gain. Saving $50,000 of that taxable gain would equate to about $7,500 tax savings at the 15% bracket. So in that case, you're proactively choosing to sell XYZ investment just simply to use that loss in order to offset a gain. You're allowed to do that and you have to do that in the same tax year. That's why we get to end of tax year planning. So the sources of gains and losses are going to come from two primary sources, the sale of an investment during the year like we described. But also if you happen to own certain types of mutual funds. Open end mutual funds are usually the biggest factor here. You always tell what those are because they have five little letter symbols. They also have to issue out capital gains distributions to all their shareholders. And sometimes that can be a surprise.
ROGER EXPLAINS HOW TO IMPLEMENT TAX LOSS HARVESTING BY ESTIMATING YOUR REALIZED CAPITAL GAINS, IDENTIFYING LOSSES IN YOUR TAXABLE ACCOUNTS, SELLING POSITIONS TO OFFSET GAINS, AND BEING MINDFUL OF THE IRS WASH SALE RULE THAT PREVENTS REPURCHASING THE SAME SECURITY WITHIN 61 DAYS.
Roger: So how do you do this now that we know this? Well, you estimate what your realized capital gains are, the short term and the long term, because they apply to each other before they go to the other. So you want to, look at the year and say, okay, what have I realized in capital gains or losses this year? And then if you have some open end mutual funds, you probably want to go to the fund company to see if they can tell you what they're going to distribute to you, because you'll owe, the taxes on any capital gains that they distribute to you. So that's step one. Know where you sit from a capital gain standpoint. Step two is to go to your taxable portfolio, your after tax account. This doesn't apply to iras or Roth iras, and look for investments that you have that might be at a loss on paper because they're down in value from where you purchase them. And you want to review that to see if there are enough losses in one or, multiple positions to really have a impact in offsetting whatever gain you're showing for the year. If you do have a loss and you select a position, in this example, we'll use that XYZ position and you say, I like the investment, but man, I'm sitting on that loss and I have this big gain, I'm going to sell it anyway, even though I like it in 2025, so I can realize the loss to save me some taxes. That is essentially what tax loss harvesting is. And then you sell the position in the same year and then you document it so when you file your taxes, you can offset gains and losses. Now, what are some considerations here? Maybe you sell this investment because you want to save that 7,500 in taxes that we described in our example. But you're like, but I still want that investment. It's a bond fund. I know they've been bad. That's why it was at a loss. But I still want to have a bond fund. My asset allocation tells me I should have a bond fund. And absent this tax strategy, I would still own it. What do you do? Well, the first thought would be, well, how about I just sell it today, realize the loss, and I'll just buy it back next week or the week after and reestablish the position. Because I want to own it, but I need to realize that loss. That might be something we think about. Well, you got to be careful with that, because then you come into what's called the wash sale rule. And so you gotta be careful not to violate that rule. And it's a rule that the IRS put in place because they know how smart we are, and they don't want us to sell an investment one day for tax purposes and just go buy it back the next day. Well, that sort of defeats the purpose of the intent of the rule. So they institute what's called the wash sale rule, which says if you claim a loss and then you buy back a substantially identical security within 61 days of the sale, then we're not gonna let you realize the loss there to, stop that loophole. And the reason I say 61 days is they look backwards 30 days, and then they look forward 30 days. So in this example, if you have this XYZ bond fund that's at a loss of $50,000, and you know you have that loss, you're like, well, I'm gonna buy a little bit more now, and then later on I'll sell it. Well, they're gonna look back 30 days to see if you did that. And they're also gonna look at if you sell XYZ bond fund so you can realize the loss to offset gains, they're gonna look. And if you buy that within 30 days after the sale, they're going to say, that's a wash sale rule. We're not going to allow you to offset your gains with the loss. So now you're stuck with, if I sell this to help myself, tax wise, but I like the position and I don't want to not be in that bond market in this example. Well, now I'm stuck. And if I sell it and I got to wait my 30 days before I can buy it back, what happens? If it goes up in value, I missed out because I'm waiting on this thing because of tax purposes. So what do you do? Well, because we're smart, what a lot of people think of doing. Well, I'll just buy basically the same investment in a different way. I'll buy it in my IRA after I've sold it in my taxable account, and that way I'm, okay. Or I'll buy it in my wife's IRA or my husband's ira. No, the IRS is going to look at those types of things. We're like, oh, okay, well, if I can't buy it in a different account within the time period of the wash sale rule that 30 days either direction. Well, what if I buy something, you know, pretty similar? Let's say I own the iShares Core US Aggregate Bond Fund. It's an ETF, and that tracks what I, what I still call the Lehman Aggregate Bond Index. It's been sold a few times, but it tracks a broad bond index. Well, if I sell the iShare US Core Bond Fund that tracks this index, well, why don't I just go buy the Vanguard version of it? Well, that is where that substantially equal phrase comes into play. The IRS will look and say, no, you can't buy something substantially equal. We see what you're trying to do there, and that substantially equals our judgment. So you can't just simply buy the same fund that does the same thing under a different wrapper because it's managed by somewhere else. Now, where what is that substantially equal really mean? Well, it's up to interpretation. But generally, if you sell an investment that tracks an index and you buy another investment that tracks the same index, that's probably substantially equal. But if you were to sell a bond fund that sold used the U.S. aggregate bond index, and you sold that, but you bought the same day a, bond that tracked the corporate bond index, that's probably not substantially equal. Or if it's a stock mutual fund, if you sold something that tracked the s and P500, well, you wouldn't want to buy a different investment that tracked the same index, but you could buy one that tracked the Russell 3000. Got to be careful of that wash sale rule. But the intent of buying something back is you still want to have exposure to the asset class. And you know where those lines are, can be a little gray, but you just don't want to buy back, you don't want to buy back the exact same one. Now, this wash sale rule applies to same stock or ETF from the same company applies to options, different share classes, etc. But the only reason you would buy it back is because you want to maintain your asset allocation. So you got to be a little careful there.
USING LOSSES IN TAXABLE ACCOUNTS STRATEGICALLY CAN HELP REDUCE CAPITAL GAINS TAXES.
Roger: But the intent of this tactic is to realize you got a lot of gains because you've looked back at the year and estimated between now and end of the year and you want to look for opportunities to sell things at a loss. Maybe it's a legacy position that you really don't want to own. Well, let's be productive with it. Realize the loss to offset gains. Or if you do want to own it, you can sell it and buy something that's similar but not substantially equal. And now you've, you've booked that loss to use to offset a gain. And that can be real dollars depending on, you know, how much capital gains you've had throughout the year. So your action item here, and we'll just make this a smart sprint, is number one, take a look at what your realized gain or loss is for the year. And you can find this in your account statements. Generally it will show you online. And we're looking for realized losses, which means you've sold the security and you've realized it. Once you have that number and if there's a good size capital gain there, look at your current positions in your taxable accounts, that's where we're talking. And see if you have positions that are at a loss and whether you can make those losses productive by selling them and either moving along your way or selling them to offset the gains. And then if you need to maintain a position, make sure you don't violate that wash sale rule. That's a productive thing that could save you thousands of dollars in capital gains tax just by being aware. And this area over the last few years, it's generally been bond funds because we had that big interest rate spike a few years ago which caused all the bond funds to go down in value. That's generally where you see this. And I've literally rotated bond fund to bond fund a couple times, making sure we don't violate substantially equal just simply to book the loss because that's net to the bottom line tax savings against capital gains, which a lot of us have now in stocks.
ROCKIN’ RETIREMENT IN THE WILD
SHARE YOUR STORY OF ROCKING RETIREMENT AT ASKROGER.ME TO INSPIRE OTHERS WITH YOUR CONFIDENCE AND PASSION.
Roger: All right, next, before we get to questions, let's move to a Rockin’ Retirement In The Wild story, I love to highlight someone not just talking about it, but being about it in terms of creating a great life in retirement, even outside of the retirement planning. So if you have Something you're willing to share about your rocking retirement in the wild. We'd love to share your story because these stories are so inspiring to me. But also there are people like you that may not be where you're at. And if they see you doing something with confidence, it could be creating great friends, it could be having a passion, it could be in finally leaning into building that resilient plan. Even though it's a little intimidating, it doesn't matter what it is. If we see other people doing something inspiring and they're like us, that really motivates us. So I'd love to hear those stories and you can share that at askroger.me.
MARK PLANS TO PIVOT INTO BUSINESS CONSULTING AFTER RETIRING SO HE CAN KEEP LEARNING, ADDING VALUE, AND CONNECTING WITH PEOPLE WHILE ENJOYING MORE FREEDOM AND PURPOSE.
Roger: All right, this comes from. Who's this from? This is from Mark. Hey, Roger and team. I am a loyal listener of the podcast and really enjoyed last week's episode with Cesar Aguirre. It's amazing how a few stories emulate with you and I could certainly relate to his great interview with you. I am four and a half years away from retiring at age 60 and your talk with Caesar was very relatable. Listening to your podcast has made me appreciate that there's much more to retirement than being able to afford it. It's the daily water cooler talks, the problem solving, the continual want to learn, meeting new industry people, and the personal satisfaction of watching your team succeed. That's a big one, isn't it? They all go away when you turn in your phone and keys. You need to have purpose in life and that feeling of completion and adding value. With this in mind, I have a plan, God willing to enter the business consulting life after retiring when I can still learn every day, have purpose and completion and continue to meet with new people all on my own terms. That's the cool thing about that. Pre tirement. Keep up the great work and have confidence that you are making a difference in people's lives. Congratulations, Mark. I love this example of you've identified some things that you see ending and rather than deal with them ending completely, you're going to pivot and do something in this case consulting, where you have more time, freedom, so you're not on that corporate grind, but you still have the things that the meeting with people, striving and learning, etc. And you're going to have a season of life where you're in between before you actually just simply retire. That's a great strategy. Not one for everybody, but it's the forethought intention that's so cool. So bravo to you, Mark. I have no doubt you're going to rock retirement, buddy. Now it's time to answer your question. If you have a question for the show, you can go to askroger Me M. Leave a written question or leave a voice question. We love the voice questions. They get a little bit of a fast pass and we'll do our best to try to get it on the show and help you rock retirement.
LISTENER QUESTIONS
RICHARD IS PREPARING FOR RETIREMENT AT 67 AND ASKS HOW HE SHOULD HANDLE HIS 401(K) AND INCOME TO MAKE HIS PLAN WORK BEST.
Roger: Our first one is a voice question that got a fast-pass, and that is from Richard.
Richard: Hey, Roger. First, I thank you for all that you've done for me over these last several years. I've listened to all of the podcasts and, coming up on four years as a member of the club. And I appreciate all that you and your team have done. You've brought me to this moment where I'll be retiring at the end of March at age 67, and I'm ready to go. So with that appreciation, I would like to ask the question. I will have some income in 2026, enough to reach what I believe is the $32,500 maximum for a 401 contribution. I have enough cash that I put away with, a lot of help from encouragement from the club, so I won't need that income. Can I basically put all of my 2026 income into a 401k after whatever mandatory reductions are necessary. Thanks in advance and again, many thanks to you.
Roger: Hey, Richard. March of 2026, huzzah. That's awesome. I know myself and the entire team are honored to be part of this journey with you. That's really great.
All right, so you have a vision, you have a feasible plan, and you've made it resilient because you have the cash to pre-fund your life. And this first quarter of 2026, you're going to have enough income to max out your 401. So the question is, well, can I just throw it there because I don't really need the money? Well, the simple answer is, yeah, Richard, of course you can. Assuming your employer allows you to defer maximum amounts, even sometimes they will allow you to do up to 100% of your income. You can definitely do that either on a tax deferred or on a Roth basis, this might be one of your last chances to get money into a Roth option. If the 401 has that option. Since you're only going to have income for a year, the tax deferral part, if you do the traditional 401 contribution, may not have a huge impact from a tax perspective because you're only working three months of the year and almost all that money is going into a 401k. In addition, if you already have a lot of tax deferred resources, it may not help you. It may exacerbate a problem in terms of you getting the money out of the IRA to begin with. So one thing you could consider, Richard, is moving that contribution, that employee contribution, from a tax deferred contribution to a Roth contribution. any employer match would still go in tax deferred just simply because you're going to have such a low income tax bracket that year. And that will be particular your situation. But I just want to make sure you at least consider that because that might be a good way of getting at least up to your match before the catch up contribution, depending on your income into a Roth in the event that you're in a low tax bracket year. I'm, excited to be part of this journey. Please ping us when you pull the plug and I'm excited to hear how this journey goes for you.
KATHY ASKED HOW A NEW BILL WILL AFFECT THOSE 65+ WITH YEAR-END TAX PLANNING, AND ROGER SAID HE’LL PROVIDE A CHECKLIST TO GUIDE NOODLE SUBSCRIBERS THROUGH THE CHANGES.
Roger: Our next question comes from Kathy and says, I have learned so much from your podcast. Will you be discussing the one big beautiful bill and how the changes will affect those of us at 65 + with investing in tax planning before the end of the year? I'll do even better than that, Cathy. Rather than discuss it on the show, I'm going to give you a checklist that you can go through between now the end of the year just to check boxes on the things that changed with this bill and how it might impact you this year. So if you are subscribed to the Noodle, we will share a checklist on just for the between now and the end of the year to make sure that you don't miss an opportunity when it comes to the more recent changes related to the bill.
KAREN POINTED OUT THAT ANNUITY PAYMENTS AREN’T INFLATION-ADJUSTED AND EMPHASIZED BALANCING THEM WITH OTHER INVESTMENTS.
Roger: Our next question comes from Karen and it's actually a comment related to an annuity question that we answered previously. It says, “Good morning Roger and crew. Thank you for everything you do to bring wisdom to us common folks. we're all common folks. Regarding annuity. I said that. She didn't say regarding annuities. I think the big risk is the chance of inflation rising and you're stuck with a payment that is no longer adequate. I was surprised that Roger didn't mention this. That's a great point, Karen. So what Karen is referring to is. And we'll have a link to the episode in the show. Nicole, Sorry, I don't know the episode number off the top of my head. We answered a question about someone recommending an annuity and whether they should buy it or not, this definitely is a consideration. Karen. So you are correct. When you purchase an annuity, almost always they are not inflation adjusted. So if you take, let's say, half a million dollars and you give it to the annuity company for a guaranteed payment, let's say it's $40,000. I'm just making these numbers up. If it's $40,000 in today's number, that $40,000 payment doesn't increase, it will be $40,000 20 years from now if you're still alive. And what Karen's referring to is that, well, inflation will eat away at the purchasing power of that dollar over time. And that is a risk. And that is one reason when you're thinking about doing an annuity, it should be from the basis of having a plan of record. Because it's a proactive choice of coupling taking some of your money to buy guaranteed income with your other sources of income, Social Security being one of them, which does increase for inflation. And that way you have a little bit of both, but you still have a larger safety net of guaranteed income forever. And if you were to put all of your money into an annuity that gave you a guaranteed payment, then you're going to have a lot more inflation risk because you don't have any other monies battling inflation. And that's why you gotta be careful in doing this, because you still want to have a bucket of money or investments, doesn't matter what kind of account that it's in trying to grow in order to offset inflation. So you want to have some balance in your assets. So if you had $500,000 to your name and that was it, you wouldn't want to put that in all into an annuity with guaranteed payments. You'd want to have a portion that is still invested in order to grow to battle inflation. And the I'll, use Jeremy Siegel stocks for the long run. You know, storied professor believe at Pennsylvania is equities stocks are the perfect hedge for inflation given enough time. And so one, the approach you would use, Karen, and I'm glad that you point this out, is we gotta be careful about inflation. So we would have our non inflation adjusted payment from the annuity, we would have Social Security, which does adjust for inflation. We'd have our normal cash reserves, et cetera, but then we would still want to have some equities that have the chance to grow over the 10, 20, 30 years that we're going to be alive. One thing nice about balancing that is that by having more guaranteed payments it allows our equity investments in this example to grow longer because we don't need the money as much because we have all this guaranteed payments. And then psychologically the fact that we have these guaranteed payments, there's a good argument to be made that it makes us much less more resilient in sticking to our equity investment strategy even when markets are really bad, because that's the price of having things like that as they go up and down all the time. But thanks for pointing that out. It helped deepen the conversation.
DAN ASKS: “WHERE SHOULD I KEEP THE CASH FOR LIVING EXPENSES AND MARKET DOWNTURNS?”
Roger: Thanks Karen and our last question for today comes from Dan and it's basically where do we keep the cash? I enjoy your podcast and learn a lot. I remember your discussion on the pie cake and having several years of living expenses and in cash for market downturns. You may have discussed this already, but my question is what type of account should this be held in? Just the bank where it collects very little interest or pre tax accounts, et cetera. Where do I have this money? we definitely did discuss this in detail, Dan, but this is like everything, we forget these things. That's why we're going over year end tax planning things. All right, where do you keep the money? It doesn't have to be in cash. When you map out how much you need from your financial assets, all of your accounts over the next five years, one is you're not going to need all the money at once. So not in cash. The key attribute of the money that is pre funding your life in making your plan resilient. The key attribute is that you know that you're going to get return of your money, preferably on a certain date. That's the most important thing. I'm going to get my money back when I need it. And then secondary is I want to earn interest or dividends or a rate of return on that money to be productive. So that obviously would not be your savings account. So then you don't need the money over the five years today. So let's assume you needed $100,000 each year for the next five years, just as an example. Daniel. Well, maybe one is for year one today, going out 365 days, you had $100,000 in a money market account in which you created a paycheck for yourself. And that could be a high yielding money market account. Your bank may pay you close to zero. I think the Schwab one we use currently is around 3.5%. So you get 3.5% on your $100,000 while you're draining it down throughout the year. Now, the next, you know what happens a year from now? Well, the $100,000 for that money, that could be in a one year CD. It could be in a one year treasury bill. It can be in a very short term investment that is going to be relatively stable in year two. Two years out, you could have a two year CD or a two year treasury bill. So you're not just going to keep it all as cash. You do want to be efficient for the money with the money in terms of earning interest, but we just want to make sure we get the money back and we don't have to sell something at a loss and feel the pain of all of that with money that we actually need to fund our life. All right, with that said, let's get on to a smart sprint. On your marks, get set. And we're off to set a little baby step you can take in the next seven days to not just rock retirement, but rock life and maybe save a doll to.
SMART SPRINT: IN THE NEXT SEVEN DAYS, REVIEW YOUR AFTER-TAX INVESTMENT ACCOUNTS, ESTIMATE YEAR-END CAPITAL GAINS OR LOSSES, AND CONSIDER SELLING POSITIONS WITH UNREALIZED LOSSES TO OFFSET GAINS WHILE AVOIDING THE 31-DAY WASH SALE RULE.
Roger: All right, in the next seven days we're going to do what we talked about. Number one, look at your after tax investment accounts and look at the realized capital gain or losses that you've received. Then number two, if you own mutual funds or are planning on selling anything between now and the end of the year, do an estimate of what you think capital gains or losses are going to be between now and the end of the year. Put that as a total. If you have capital gains and they are substantial, you can easily do an estimate of what your capital gains tax might be. If they're long term, I would just use 15% or 20% as the number. Look at your after tax investment accounts, not your IRAs, not your Roths, not your 401 s, your after tax investment accounts and see what positions you own that currently have a loss that is unrealized. And then make an assessment. Is it worth selling that investment to offset some gains so I can save on my capital gains tax? It may not be, may not be worth the effort. If there are some that you're going to sell, then ask the question, when I sell this, am I okay waiting 31 days before I buy it back? If I buy it back at all, or do I want to have that position whether it's a stock or a mutual fund in a particular asset class? If you do, then just make sure you don't buy something within 31 days that's substantially equal. You could buy something similar, but not substantially equal. If you want to maintain position in bonds. It could go from aggregate index to a corporate index, or to a high yield index or a foreign index. You get the idea. That's your action item if you choose to take it. Now, this is an optimization under the optimization pillar. You're totally fine if you don't do any of this and go Christmas shopping.
OUTRO: OVER THANKSGIVING, ROGER CONTINUED HIS CHILDHOOD TRADITION OF WATCHING THE LIONS LOSE, ENDING UP JUMPING IN A POOL AFTER A BET WITH HIS NEPHEW GRAHAM, A DEVOTED PACKERS FAN.
Roger: So last week over Thanksgiving, the tradition has continued ever since I was a child and I had the pleasure of going to, well, or the sadness of going to many Lions Thanksgiving Day games because they always played on Thanksgiving. Well, my Lions lost again on Thanksgiving and this time it was especially traumatic because my nephew Graham, who edits this podcast, hey, Graham, how you doing, buddy? Is a rabid Packers fan and he came over and we made a bet beforehand that whichever team lost, the other person had to go jump in the pool. And so I had the pleasure of jumping in the pool and Graham filming it. Oh, you Lions. Oh. Don't know if they're gonna make the playoffs, but it's always fun to watch them. Hope you're having a wonderful, well, December. The opinions voiced in this podcast are for general information only and not intended to provide specific advice or recommendations for any individual.
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