How to Open a Sheltered Investment Account

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The most popular ways to open a sheltered investment account are by putting money into an individual retirement account or opening a 401K. Make money tax free through a sheltered investment account with tips from an investment consultant in this free video on investing.

Part of the Video Series: Investment Advice
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Video Transcript

Are you trying to figure out how to maximize your after-tax rate of return? Hi, I'm Roger Groh of Groh Asset Management. One of the ways that you can do that is to open up an account for buying stocks or bonds that is sheltered from tax. Now, what would those accounts be called? Well, two of the most popular would be individual retirement accounts, and the second would be 401k through your employer. The way they both work is you put money in today. That money accumulates tax-free, and once you begin to take money out, then that is taxed as ordinary income on the date that it comes out. The benefit? It's tax-free as long as you do not take any money out. There are specific times in your life, though, when you are required to begin to take money out, and generally, it's when you're over 65. You'd have to consult your tax professional to look at what those exact dates are. It's a terrific thing to the degree that you can invest that way, as opposed to investing taxably, which should significantly improve your rate of return over a multi-year period. I'm Roger Groh, and that's a little bit about investing in sheltered investment accounts. I hope it helped.


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