Betterment Tax-Loss Harvesting
Automated tax-loss harvesting and asset location technology to help reduce your tax burden and improve after-tax returns.
Overview
Betterment Tax-Loss Harvesting automatically sells assets that have lost value to generate tax losses that can offset capital gains and reduce taxable income. The proceeds are reinvested in similar assets to maintain portfolio allocation and growth potential.
The platform also optimizes asset location by placing investments in accounts that minimize tax impact, such as holding high-tax bonds in IRAs and stocks in taxable accounts. It provides tax impact previews to help investors make informed decisions when transferring, reallocating, or withdrawing funds.
Betterment uses low-cost, tax-efficient ETFs and employs tax-efficient withdrawal strategies to further reduce tax liabilities. The service aims to cover advisory fees through estimated tax savings for many users.
Key Features
- + Automated tax-loss harvesting to realize losses and offset gains
- + Asset location optimization across taxable and tax-advantaged accounts
- + Tax impact preview for transfers, allocation changes, and withdrawals
- + Use of low-cost, tax-efficient ETFs in portfolios
- + Tax-efficient withdrawal ordering to minimize tax liabilities
- + Estimated tax savings to potentially cover advisory fees