After logging in, go to the top right side and click "Set Up" next to "Tax-Coordinated Dividends" in the header of your Summary tab. Next, follow the steps to set up your portfolio. You'll be prompted to select accounts to include and to select a single allocation for the entire portfolio.
Asset location is a long-term strategy. While it may lower taxes in the short-term, the greater benefits typically come from a longer investment period. It is not appropriate for investors who are in a Federal tax bracket of 15% or lower. There may be other considerations, depending on your personal circumstances. Please see the full disclosure for details.
Yes. Asset location will not affect your ability to withdraw money. Note that long-term investors typically benefit the most from asset allocation and frequently withdrawing your money or making allocation changes may limit the benefits of this strategy.
Having a Tax-Coordinated Portfolio at Betterment does not affect your external accounts. For these funds to benefit from our automated asset location, you would need to roll over or transfer them to Betterment.
Yes, generally it’s more tax-efficient to roll over first and then funding your taxable account. This is because we can make larger rebalances in your IRAs (as compared to your taxable accounts) without causing you taxes. Learn more about rolling over a retirement account to Betterment.
You can change it at any time by going to the Advice tab. As always, changing your allocation can trigger taxable events, so you should avoid changing it, unless your investment objective has changed. If you do, our Tax Impact Preview feature will show you a real-time tax estimate before you confirm an allocation change.
If you decide you no longer want these accounts coordinated, email us and we'll be happy to help.
Read more about Tax-Coordinated Portfolio and how Betterment automated asset location in our white paper.