Frequently asked questions (FAQs)



Remember the majority of what we discuss here describes a developing program, but we’d like to provide you with some information about our proposed services.

  • How will I save on taxes?

    How you withdraw your money and manage your investments in retirement can have a big impact on taxes. It can be cumbersome to withdraw from multiple accounts on your own, but by automating our methodology, we aim to help you save money in retirement and make your plan last longer.

  • How will you estimate withdrawals tax-efficiently?

    While you were working, you were likely taxed on the salary you earned. The investments you hold in certain accounts, the amounts you withdraw, what you sell, and the timing of those transactions may become the primary drivers of income—and taxes.

    Some retirees dig into their taxable accounts (checking, savings or brokerage) first, but actually, it may be more beneficial for you in the long term to withdraw from all account types in smaller increments. So that means your tax-deferred (Traditional IRA) and tax-exempt (Roth IRA) accounts as well.

    When we’re able to make withdrawals, we’ll run many simulations every time to look for tax-efficient ways to draw from your accounts. Taxes are complicated, but we’ll make it feel easy and painless.

  • How will you apply tax-smart investing strategies?

    We’ll use a few key strategies designed to help you keep more of what you earn in retirement.

    • Tax-loss harvesting – When we launch, we will continually seek appropriate opportunities to sell securities that have experienced a loss in order to offset capital gains and potentially reduce ordinary taxable income, saving you money.
    • Asset location – Different accounts have different tax benefits. So, whether an investment generates capital gains, interest or dividends, we will aim to put each investment into the right account to help reduce taxes on your portfolio.
    • Withdrawal and RMD management – Instead of drawing from one account type first and then the next, we’ll draw from your taxable, tax-exempt and tax-deferred accounts in smaller increments to help reduce your tax burden over time. We’ll also help you track required minimum distributions (RMDs) or take them for you, so you don’t incur a tax penalty.
    • Capital gains management – We’ll try to avoid taking short-term capital gains when possible because they’re taxed at less favorable rates than long-term gains.
  • Why are you categorizing my accounts into taxable, tax-deferred and tax-exempt?

    Different types of accounts are taxed in different ways. Taxable (checking, savings, brokerage) generally means you pay taxes as you go and are taxed on interest, dividends and realized capital gains. Tax-deferred (Traditional IRA) generally means you pay when you withdraw, taxed as ordinary income. And tax-exempt (Roth IRA) generally means you’ve contributed with after-tax dollars, so you can withdraw tax-free.

These FAQs do not describe an existing service and Fidelity Investments reserves the rights to modify any portion of this concept. This information is for marketing purposes only and does not constitute an offer of any existing products or services.

See what this could mean for you

Get started

This experience is for people nearing or in retirement who file single or married filing jointly.