The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: travelfreak111 on December 15, 2017, 02:55:18 PM

Title: Opening Betterment account just for Tax loss harvest
Post by: travelfreak111 on December 15, 2017, 02:55:18 PM

I have vanguard for all my investments (index funds). I don’t know how to Tax loss harvest and my tax bracket is high.
Would you open a betterment account for $100k for .15% fee just for tax loss harvest purposes?The .15% fee ($150/year) would be far more less than not to TLH.

Title: Re: Opening Betterment account just for Tax loss harvest
Post by: alexpkeaton on December 15, 2017, 03:11:56 PM

My guess is almost everyone here will tell you not to because why pay the extra 0.15% when you could simply do it on your own.

But, sure, go ahead. If you wouldn't TLH otherwise, it's a win. The big caveat, however, is that the strategy only works if you're continually making purchases. If you harvest losses and lower your basis, eventually you'll stop having losses. You need to keep purchasing stock with at higher basis so that you'll be able to capture losses. If you're still growing your wealth this should be no problem. When you retire you'll probably want to put your money elsewhere.