Will the Right Investments in the Wrong Accounts Impact Your Retirement? LFG Daily - October 16, 2025

Dream Bigger, Sleep Better

Luke Lloyd, CEO Lloyd Financial Group

The Smart Location Strategy: Why Your Growth Investments Belong in the Right Accounts—Especially Later in Life

When it comes to investing, most people focus on what they invest in — stocks, bonds, mutual funds, real estate, etc. But just as important is where you invest. That’s right — the type of account you hold your investments in can significantly impact how much you actually keep over time.

This concept is called asset location — and while it often gets overlooked, it becomes especially critical in your later retirement years when every dollar of income, tax efficiency, and Social Security benefit matters.

Not All Accounts Are Taxed Equally

You’ve likely heard the term tax diversification before — having a mix of taxable, tax-deferred, and tax-free accounts. Each has its place in a well-rounded financial plan:

• Taxable Accounts – Brokerage accounts where you pay taxes on dividends, interest, and capital gains annually.

• Tax-Deferred Accounts – Traditional IRAs or 401(k)s where taxes are postponed until you withdraw.

• Tax-Free Accounts – Roth IRAs or Roth 401(k)s where qualified withdrawals are completely tax-free.

Knowing how each is taxed allows you to place the right investments in the right type of account.

Where the Growth Belongs

In general, higher-growth investments — like stocks or stock mutual funds — are best suited for tax-advantaged accounts such as Roth IRAs or Traditional IRAs. Here’s why:

• Inside a Roth IRA, your money grows tax-free, and you’ll never pay taxes on those gains later. Putting long-term, higher-growth assets here maximizes the tax-free compounding potential.

• Inside a Traditional IRA or 401(k)**, growth is tax-deferred. That means your dividends and capital gains aren’t taxed each year, allowing compounding to work more efficiently — but you’ll pay ordinary income taxes on withdrawals later.

• In a taxable brokerage account, your gains and dividends can create annual tax drag. Over time, that can cost you thousands — especially if you’re no longer earning a paycheck and are relying on Social Security or withdrawals for income.

  
  

Why It Matters More in Retirement

As you get older and rely more on Social Security, pension income, and portfolio withdrawals, managing your taxable income becomes critical. The more taxable income you show on paper, the more of your Social Security benefits can become taxable — up to 85%.

So if you’re generating unnecessary taxable income from high-growth investments sitting in a taxable account, you could be:

• Paying capital gains taxes earlier than necessary

• Increasing the portion of your Social Security that’s taxed

• Potentially pushing yourself into a higher Medicare premium bracket

  
  

Meanwhile, keeping your higher-growth investments in Roth accounts allows those assets to continue growing tax-free — and future withdrawals won’t count against your income calculations for Social Security or Medicare purposes.

A Smarter Withdrawal Strategy

Think of this as building tax-efficiency into your retirement income strategy. By prioritizing where your investments grow, you can better control where your income comes from later.

• Draw from taxable accounts first (harvesting gains strategically)

• Keep growth-oriented investments in Roths or tax-deferred accounts

• Rebalance with tax location in mind — not just risk tolerance

The goal is simple: reduce lifetime taxes, not just this year’s taxes.

Dream Bigger, Sleep Better

At Lloyd Financial Group, we help clients align not just their investments, but the location of those investments — so their wealth works harder after taxes. The right strategy can mean more control, more income, and more peace of mind throughout retirement.

If you’re unsure whether your investments are in the best tax-qualified accounts, it may be time to review your asset location strategy. A few smart moves today can lead to better sleep — and bigger dreams — tomorrow.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

Colin Symons, CIO Lloyd Financial Group

Empire State Manufacturing index was 10.7 vs. est. -1.8, with everything improving. Considering last month’s -8.7, that may be more about stabilization than anything.

The Fed’s Beige Book was fairly boring, really, showing a steady but slowing economy with stable employment.

Bessent suggested the possibility of a longer China tariff truce. That lifted stocks until Trump said we’re in a trade war with China. Guess that’s news to some people.

BofA said the Friday dip was met with the biggest surge of inflows in over a year.

Taiwan Semi (TSM) beat and raised but is only up a bit. Still, that’s a relief for the semi space.

Gold crossed $4200 as up and to the right continues.

Philly Fed Manufacturing, today, plus about 500 central bank speeches.

What does it all mean? The market remains nervous and is hoping for a resolution but remains in a broad uptrend. Was this another pause that refreshes, creating better conditions for more upside?

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

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This content is intended to provide general information about Lloyd Financial. It is not intended to offer or deliver investment advice in any way. Information regarding investment services are provided solely to gain an understanding of our investment philosophy, our strategies and to be able to contact us for further information.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

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Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable