Taxable vs. Tax Advantaged Investments

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The purpose of the Taxable Vs. Tax Advantaged Investments tool is to help investors compare taxable, tax-deferred and tax-free investment options. To use this tool you will need to enter the annual rate of return, the years to contribute, the years of withdraws, the existing balance, new contribution amounts, tax during contributions and the tax during withdrawals. There are a lot of options that you can select. For example, you can select to show withdrawals amounts or yearly balances.

Taxable vs. Tax Advantaged Investments Overview

There are three main types of investments: taxable, tax deferred and tax free. While tax-free investments sound like the best option to use they tend to have lower return rates than taxable investments. If you are wondering which type of investment to select you may want to run through our Taxable Vs. Tax Advantaged Investments tool.