Very simply, taxable accounts are those accounts in which all income, including dividends, interest and capital gains, is subject to current taxation. Retirement accounts, on the other hand, are those accounts in which the taxes on the dividends, interest and capital gains are either deferred into the future or eliminated altogether.
At WAM, we tend to manage the taxable accounts a little more aggressively than the retirement accounts. The principal reason for that is within a taxable account, should you incur a loss, that loss can be used to reduce your gains for tax purposes. In other words, there can be a “value” to harvesting those losses. In retirement accounts, on the other hand, a loss is just a loss. Therefore, we tend to be more conservative with our investment choices in retirement accounts.
There are a number of different types of retirement accounts. We have described them in great detail in the Retirement Accounts section of the Products and Services area of this site. We suggest that if you would like further information on the types of retirement accounts available to you, please click over to that section.