2. Watch asset location with IRAs.
Evaluate asset location with both Roth IRAs and traditional IRAs. Think about the tax treatment of your clients’ assets and where they ought to keep that money.
Bonds are subject to taxes on income and capital gains, so they’ll fare better in an IRA. Stocks, however, are taxed for capital gains when they’re sold; dividends are taxed at the same rate as capital gains.
“From a tax perspective, you want bonds in your IRA and stocks in the palm of your hand,” said Mr. Keebler.