Retirement income
Asset location
Asset location is the decision about which investments to hold in which type of account (taxable, tax-deferred or tax-free), as distinct from asset allocation, which is what you hold overall.
Also called asset placement
Because account types are taxed differently, the same portfolio can produce materially different after-tax results depending on where each holding sits. Placing tax-inefficient assets inside sheltered accounts and leaving tax-efficient ones outside is one of the few improvements available that changes the outcome without changing the risk.
It is invisible to anyone looking only at an allocation report, which is exactly why it goes unaddressed in portfolios that are otherwise well managed.
What it does not do
Asset location does not change your risk exposure and is not a substitute for getting the allocation right. It is a second-order optimization, but an unusually reliable one, because it does not depend on predicting anything.
This entry is a general explanation, not advice for your situation, and it deliberately avoids thresholds and figures, because those are the part most likely to be out of date. Reviewed August 27, 2026. If a decision turns on any of it, ring the office rather than relying on a page.
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These interact with it.
From definition to your situation
Whether this applies to you is a different question.
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