For decades, you worked tirelessly to build your wealth through a diversified investment portfolio. Wouldn’t it be nice to keep more of the interest income from your investments? It’s certainly doable when you use advanced tax strategies as laid out by Tactical Wealth.
Most people we see that have large interest income already have fixed income investments. So why does Tactical Wealth become the most sensible option for you? Well, not only do we offer higher rates, but we also offer tax combinations that let you keep more of your earnings.
How our tax strategy works
This is a type of flexible mortgage which calculates interest payable on the net balance between a home loan and a specified investment account. Not only does this lower the lifetime interest paid on your home loan, but it also can have significant tax advantages as a tax is no longer paid on interest earnings. The separate offset account arrangement ensures that cash balances are immediately available for use if needs require.
Take a look at the infographic for a moment.
In Example B, an individual earns an annual salary of $250,000 and has a mortgage balance on their primary residence of $5,000,000 with interest charged at 4.5 percent. On top of that, the individual has the same balance in a high-interest savings account, earning 3.2 percent interest. The use of the offset account will make the individual nearly $270,000 better off per year, or over $8,000,000 over a standard 30-year mortgage.
How to enhance your wealth creation
Smart investors know how to create wealth by fixing costs over the long-term and letting income appreciate with inflation whether through interest income or rents on the property. In a fixed rate loan, your costs are fixed for the life of the loan. However, the rents you collect on an investment property can fluctuate and increase with inflation or with property price appreciation.
That spread on your revenue over your costs gets wider as time goes on. That’s why some properties may be great investments even if they only break even on cash flows now. Your wealth creation undoubtedly goes into hyperdrive if you factor in the tax benefits of owning property and our tax-advantaged interest.
Check out Example C in the infographic for more of a bird’s-eye view.
Tax-Efficient Retirement With Tactical Wealth
Far too many retirees fail to account for future tax scenarios during their golden years. Sure, you might have assets in IRAs, employer-sponsored 401K plans, and/or taxable retirement investment accounts. But how do you really know which accounts your distributions should come from to minimize taxes?
Here at Tactical Wealth, we can easily navigate the murky waters of tax-efficient retirement strategies. Our team will recommend either a Pro-Rata Strategy, Sequential Strategy, or Sequential With Roth Conversion Strategy depending on your financial needs.
Tax-efficient distribution strategies allow you to get the most out of your high return investments and wealth as a whole. Contact Tactical Wealth today if you’re interested in proven, risk-averse investments.
