How to choose the right mix of investments
Whether you already invest or are just starting out, you may wonder how to find the right choices from so many possibilities. Start by considering your goals, risk tolerance, time horizon and liquidity needs. Knowing what you want to achieve makes it easier to find the right mix—or asset allocation—to help you get there.
- To be eligible for favorable tax treatment afforded to any earnings portion of withdrawals from Section 529 accounts, such withdrawals must be used for “qualified higher education expenses,” as defined in the Internal Revenue Code. Any earnings withdrawn that are not used for such expenses are subject to federal income tax and may be subject to a 10% additional federal tax as well as state and local income taxes.
- Effective 3/27/20, in accordance with the CARES Act, a Coronavirus-Related Distribution CRD) of as much as $100,000 of all your eligible employer-sponsored retirement plan or IRA assets is permitted before December 31, 2020. The CRD may be repaid to an eligible retirement plan within three years. Individuals who choose not to repay the distribution will be required to include the taxable portion of the distribution in income evenly over three years from the date of distribution, unless they elect otherwise. With limited exceptions, the 10% additional tax that usually applies to distributions prior to age 59½ is waived for CRDs.
- The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss.
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Bank of America and its affiliates do not provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.