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Personal Strategy®

Tax-loss harvesting

The portfolio management method known as tax-loss harvesting allows you to sell an investment at a loss to offset gains you’ve realized and reduce your overall tax burden by reducing your net capital gains. It’s particularly beneficial for offsetting short-term capital gains, which are taxed at the federal income tax rate and at a higher rate than long-term capital gains.

Tax-loss harvesting is one of the critical tax-optimization strategies we use as part of your Personal Strategy™. Because taxes can significantly reduce your portfolio return, we aim to optimize your portfolio for tax purposes.

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Personal Strategy

Tax-loss harvesting is part of a three-pronged approach that also includes asset location and tax efficiency:


First, we strategically place investments in their most tax-efficient account types. This strategy is ideal for investors with both taxable and tax-advantaged retirement accounts in their portfolios.


Then we employ tax-loss harvesting, through which we intentionally sell securities at a loss to turn an unrealized loss into a realized loss. Not only can this strategy help offset any realized capital gains you have, but it can also help create a capital loss deduction of up to $3,000 (IRS limit, subject to change).


Finally, we build your portfolio using individual stocks and tax-efficient ETFs rather than mutual funds to help maximize tax efficiency.

“EMPOWER” and all associated logos and product names are trademarks of Empower Annuity Insurance Company of America. This material is for informational purposes only and is not intended to provide investment, legal, or tax recommendations or advice.
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