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This strategy places investments in the account type where they are taxed most favorably — tax-deferred for bonds, taxable for tax-efficient equities, and Roth for high-growth assets.
This strategy places investments in the account type where they are taxed most favorably. Tax-deferred accounts (IRA, 401(k)) are best for bonds and high-income investments. Taxable accounts are best for tax-efficient equities like index funds. Roth accounts are best for high-growth assets.
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