The theme this week on the Retirement Quick Tips Podcast is: Don’t Just Sit There. Do Something! If you can do something proactive other than just sitting on your hands and hoping that the markets turn around soon, you’ll be better able to get through this difficult time while keeping your long term investment strategy intact. 

Today, I’m talking about another one of my favorite steps you can take during this difficult time, which is looking for losses and doing some tax loss harvesting. 

This only works for your non-IRA and 401k accounts, so if you only have assets in these accounts only, you won’t be able to use this strategy. If, on the other hand, you have taxable brokerage accounts - like an individual, joint, or trust account, here’s what you’ll want to do:

Take a look at your unrealized gains and loss column. You should be able to find this on your monthly statement or when you pull up your accounts online. 

Do you have any holdings in your taxable accounts that have an unrealized loss? If the loss is significant, it’s probably worth selling so you can use those losses to offset gains. You’re limited to the losses you can use to lower your taxes in a given year, but you can carryforward losses to future years too, so having those losses could benefit you for years to come. 

Once you determine your biggest losers, you’ll want to decide if you still want to own the investment or not. If it’s not a good investment and you’re glad to be rid of it, then you can sell it and claim the loss on your taxes. 

If you still want to own the investment, that’s fine too. You can still sell it, but you’ll need to wait 30 days before buying it back again. This will keep you from falling into the wash sale rule, and will force you to sit out for a month if you decide to sell it. Which in this current volatile environment is probably not such a bad thing anyway. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance