Taxes can significantly impact after-tax investment returns, and the cash left over to spend or retire on. Before considering a tax-free investment though, it is important for savers to understand the benefits attached to these investments. They should also have a firm grasp of the relevant legislation and the alternatives to these investment vehicles. When trying to maximise cash from an investment, there are certain circumstances where a tax-free investment is preferable, while at other times it makes very little difference when comparing a taxed investment to a tax-free one.
Taxes can significantly impact after-tax investment returns, and the cash left over to spend or retire on. Before considering a tax-free investment though, it is important for savers to understand the benefits attached to these investments. They should also have a firm grasp of the relevant legislation and the alternatives to these investment vehicles. When trying to maximise cash from an investment, there are certain circumstances where a tax-free investment is preferable, while at other times it makes very little difference when comparing a taxed investment to a tax-free one.