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What financial planning basics should you consider to maintain a healthy financial life? Join the conversation on common financial planning strategies on education, retirement, taxes and estate planning.



It’s About Automation, Not Fees

Automated investment services are successful because they are automated, not because they are low priced. They are low priced because they are automated, but that’s not why most people choose them. Broadly, preference for automation is a generational thing, much like music. Baby Boomers who grew up on rock ‘n roll didn’t transition their musical taste to classical when they got older. They were conditioned as a generation to like a particular style of music, and stuck with it. We believe the same is true for the way people interact with the Internet. While older people like the convenience of the Web, they also like talking to people “in person.” In contrast young people who grew up “digitally native” prefer […]

529 Series, Part 2: The Benefits of Superfunding

On June 1, 2016, Wealthfront announced its new 529 College Savings Plan. This post is the second in a three-part series updating our previous advice on saving for college using 529 plans. This post is based on an original 2014 post by Adam Nash. One of the largest financial obligations that many parents decide to take on is funding their child’s college education. With the current four-year cost of a California public education at UCLA at $136,000 and a private education at Stanford at $267,000, this can be a daunting task even for professionals with high-paying careers. The 529 plan is the most popular of several deferred savings plans for college. While contributions to a 529 plan are not deductible […]

The 529 Series, Part 1: Five Simple Questions When Saving for College

On June 1, 2016, Wealthfront announced its new 529 College Savings Plan. This post is the first in a 3-part series updating our previous advice on saving for college using 529 plans. This post is based on an original 2012 post by Jeff Rosenberger, PhD. For most households, the birth of a child represents a wide range of conflicting emotions and new found responsibilities. From an investment standpoint, it is at this moment that many parents confront a familiar, and yet suddenly urgent financial goal: how to save for the ever-increasing financial burden of a college education. Saving for college can be a daunting financial goal. If you have a newborn daughter, you’ll need roughly $540,000 to pay for her […]

Introducing the Wealthfront 529 College Savings Plan

On December 31, 2015, my wife Katharine and I welcomed our first child Beatrix into the world. As anyone who has had the privilege of becoming a parent knows, we found ourselves overwhelmed by both the indescribable joy that comes with the birth of a child and a certain trepidation about the enormous responsibility for this little person’s life, well-being and future. One of the most important ways that parents can provide for their child’s future is funding a quality college education. The challenge of setting aside large sums of money to fund a college degree is not news to any parent, but the price tag associated with higher education has become staggering. According to data compiled by the College […]

Why Wealthfront is a wise choice for finance professionals

At first blush, the suggestion that finance professionals should choose an automated investment service like Wealthfront to manage their investments seems to make little sense. Wouldn’t folks who monitor 30-day moving averages and asset class correlations for a living prefer to actively manage their investments? Don’t they have pockets full of arbitrage trade ideas just waiting to be executed? As someone who formerly worked in fixed income derivatives, I can tell you that these idealized versions of how financial professionals handle their own portfolios rarely, if ever, occur in real life. One reason is the NYSE’s Rule 407, which applies to any employee of a firm that does business with NYSE Euronext, is a member of FINRA, or is registered […]

Investment Fees Matter, But Taxes Matter Even More

For more than 40 years, our Chief Investment Officer Burt Malkiel has been telling investors that you can’t outperform the market, so you should buy index funds and focus on the three things over which you do have control: minimizing fees, minimizing taxes and staying diversified. Minimizing fees gets a lot of attention from personal finance bloggers, but minimizing taxes gets almost none. That’s because these tax-minimization strategies are often hard to understand and even harder to put into practice, and thus have mainly been used by high net worth individuals who are serviced by well-paid financial advisors. And that’s bad news for the portfolios of average investors like yourself, because as I will show in this article, taking steps […]

Last Minute Advice on Retirement Accounts

Ordinarily, important investment decisions shouldn’t be rushed. But this week presents an exception, because you only have a few days left to contribute to your retirement account and get a credit for the amount on 2015 taxes. You need to do so by Monday, April 18, 2016, the same day taxes are due, which is three days later than the traditional filing date, on account of April 15 being a holiday in Washington D.C. And if you don’t already have a retirement account, you’re also going to need to open one by Monday. (The deadline to do so with Wealthfront is Friday, April 15.) Retirement accounts are a somewhat complex topic, with so many permutations that most people can’t absorb […]

Introducing Wealthfront 3.0

When we launched Wealthfront in December 2011, the idea behind our first generation service was simple: take the best practices of investment management like diversification, rebalancing, dividend reinvestment and tax-loss harvesting, and automate them so investors could get these benefits without the high fees and high minimums of the traditional industry. The advent of low-cost ETFs and the relentlessly improving economics of consumer software made Wealthfront 1.0 possible. In December 2013, we launched Wealthfront 2.0. Our second generation service built a series of high value-added services that previously were only available to the wealthy, and layered them on top of our basic service. These innovative services include our Direct Indexing Platform, Single-Stock Diversification Service, and Automated Tax-Minimized Brokerage Transfers. No […]

Qualified Small Business Stock Is An Often Overlooked Tax Windfall

Editor’s Note: This post was originally published on February 26, 2015. Given recent changes to the tax code, we are updating and re-publishing it. It’s no secret that small businesses have long been the growth engine of the US economy. With that in mind, Congress has packed the tax code with lots of breaks for those investing in small companies. One of the best, but little known breaks became permanent with the passage of the Protecting Americans from Tax Hikes (PATH) Act on December 18, 2015. I am referring to qualified small business stock (QSBS), a big reason for venture capitalists, angel investors, and entrepreneurs to smile in 2016 and beyond. What is QSBS? Like all things in tax, the IRS […]

We’ve Made Filing Your Taxes Even Easier

For too many investors, tax season is a time filled with unwelcomed surprises.  Not only can investment taxes be confusing and difficult to file, but at most traditional brokerages, you only realize a hefty tax bill is due when you receive your 1099 forms.  At Wealthfront, we pride ourselves on our efforts to both minimize our clients’ taxes and make them as simple as possible to file.  This year, we’re proud to say we have worked hard to make it even easier to file your 2015 taxes. Automated TurboTax Integration for Direct Indexing  From a tax perspective, 2015 was an unprecedented year of tax savings for Wealthfront clients who took advantage of our Daily Tax-Loss Harvesting and Direct Indexing services. […]