Discover the tips and strategies that will help you achieve your retirement goals.

I'm your host, James Canole, and this is the podcast dedicated to helping you retire well.

It all starts right here on Ready for Retirement. for retirement.

Hi, everyone, and welcome back to another episode of Ready for Retirement.

I'm your host, James Cannell.

And on today's episode, we are going to explore why it is ETFs or exchange-traded funds can be so much more tax efficient than mutual

funds. Obviously, this is important because when you're investing, it's not the return that

you're getting that we care most about. It's what's the after-tax return that you're getting.

So that's exactly what we're going to explore on today's episode to see how you can do better

with your after-tax returns.

Now, this episode comes from a listener question, and this listener question is from Tim.

Tim says, enjoy your show. Common issues regarding investment and retirement discussed and answered

thoroughly, and the response is well thought out and actionable by listeners.

Thank you for providing very useful information and advice compared to some other podcasts out there. Thank you, Tim. I appreciate that. Tim goes on to say, appreciate if you

could answer a question about capital gains on investments. Every investing podcast and financial

advisor spends a lot of time discussing tax advantages of index funds in a non-qualified account

to avoid capital gain distributions and or they advised to avoid

rebalancing too frequently to avoid capital gains. I don't understand the math of that.

If I sold a mutual fund or stock and made a long-term capital gain of $100, that is $85

in my pocket and $15 in Uncle Sam's. Same thing if the fund distributed capital gains to me

at the end of the year.

That's still a profit for me. Unless it's a short-term capital gain that is big enough to bump me up from one marginal tax bracket to the next, I don't understand why a mutual fund

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