BOSTON--(BUSINESS WIRE)--LifeYield, LLC, the leading provider of tax-smart household portfolio management software to financial institutions today announced it will deliver LifeYield Tax Optimizer1 as part of select Quicken® 2016 products to help improve an investor’s after-tax outcomes across multiple investment accounts.
Previously only available to financial advisors, LifeYield TO™ is now integrated with Quicken 2016 Premier, Home & Business, and Rental Property Manager. LifeYield TO™ enables individual investors to easily manage multiple brokerage, IRA and 401(k) accounts in a coordinated, tax-smart way and helps investors avoid paying unnecessary taxes on investment returns so they can increase the chances of achieving their financial goals.
LifeYield Tax Optimizer employs a strategy known as Optimal Asset Location, which analyzes how an investor’s assets will be taxed in each type of taxable or tax advantaged account. LifeYield TO then suggests in which account to own, or locate, each asset in order to minimize taxes. Research by Morningstar indicates investors can improve after-tax returns by up to one-half percent per year, which can be meaningful over time in growing investor household assets.2
How it Works
An investor with one taxable account and one IRA account chooses an asset allocation that includes an equity mutual fund and an income producing bond. With the traditional approach, each of the investor’s taxable and IRA/401(k) accounts would have the same asset allocation and each would hold both of those assets in the same proportion.
Using a tax-smart Optimal Asset Location strategy, LifeYield TO suggests holding the income producing bond in the IRA where it will not be subject to the higher ordinary income taxes each year and will only be taxed when money eventually is withdrawn from the account. The equity mutual fund will be held in the taxable account where the investor can take advantage of the lower long term capital gains tax rate. And while each account will have a different asset allocation, the combined asset allocation of the two accounts will match the target household asset allocation chosen by the investor.
“Others claim to provide tax-smart portfolio management, but they are limited to avoiding short term capital gains taxes,” said Michael Benedek, president of LifeYield. “By coordinating the management of taxable and tax deferred accounts, additional tax savings can be enjoyed and much better results can be achieved. LifeYield TO™ employs patent-pending tax-smart strategies that historically have been available only to ultra-high net worth investors. It is the only robust tax-smart household investment management software available to individual investors.”
About LifeYield
LifeYield Tax-Smart Solutions are designed to help investors, advisors and firms improve after-tax investment outcomes and achieve their goals. LifeYield’s goals-based, multiple account management software helps minimize taxes while maintaining the desired asset allocation during the accumulation of assets and throughout retirement.
LifeYield’s full suite of Tax-Smart Software Solutions includes:
- Asset Location & Model Optimizer
- Multi-Account Monitor & Re-balancer
- Social Security Optimizer
- Income Sourcing Optimizer
LifeYield was founded in 2008 by successful financial technology industry veterans and is headquartered in Boston, Massachusetts. For more information, please visit www.lifeyield.com or email Jack Sharry at jack.sharry@lifeyield.com.
All trademarks are the property of their respective owners. Quicken does not provide financial, investment, tax, legal, or other advice or advisory services and nothing in this material is intended or should be construed to do so.
1 All advice and projections are provided by LifeYield
Advisor, LLC, an SEC Registered Investment Advisor.
2
“Alpha, Beta, and Now…Gamma,” Blanchett, David, CFA, CFP, and Kaplan,
Paul, Ph.D., CFA, Morningstar, Inc., 2013.
