- Introduction
- Reverse Mortgage
- Sale and Leaseback of Your Home
- Nonqualified Deferred Compensation Plans
- Income Deferral Programs
- Other Investments for Retirement
- Comparing Taxable and Tax-Exempt Yields
- Capital Gains Tax Rates
- Tax Rate on Dividends
- Comparing Tax-Advantaged Investing to Other Investing
- Investing in Growth Stocks or Growth Mutual Funds
Investing in stocks that offer long-term growth (or growth stock mutual funds with little turnover) and that pay little or no dividends can simulate tax-deferred investing. There is no current income tax to pay if the stocks are not paying current income, and you don't pay tax on the growth until the stocks are sold. So, in effect, you are deferring tax on the gain in your investment. Another advantage of holding stocks for more than one year outside of a tax-deferred vehicle is that, if the stocks are sold at a gain, the gain is taxed at the long-term capital gain rate, rather than as ordinary income. The maximum tax rate on net long-term capital gains is 20% in 2020 for individuals above the top income tax bracket threshold. For the middle brackets it is 15% and for those in the 10% or 15% bracket, the rate is 0%. Investments must be held for more than one year to qualify for these preferential rates. Gains on property held for one year or less are treated as short-term capital gains, subject to tax at the same rates as ordinary income. Please note that these rates may change in the future.
- ARE NOT A DEPOSIT
- ARE NOT FDIC-INSURED
- ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
- ARE NOT GUARANTEED BY THE BANK
- MAY GO DOWN IN VALUE
Important information about procedures for opening a new account
To help the government fight the funding of Terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.
What this means to you: When you open an account, we will ask you for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.
Investment products are offered through Osaic Institutions, Inc., Member FINRA/SIPC. Insurance products offered through Osaic Institutions, Inc.