Most investors understand that they need diversification in their portfolios. As a result, they are fairly good about settling on a mix of aggressive, moderate-risk and low-risk investments.
But one area people often fail to account for — especially when saving for retirement — is diversification of the tax status of their assets. Take a look at the retirement accounts of many Americans, and you will likely see they are heavily weighted toward IRA, 401(k), 457 and 403(b) accounts. People rely on that savings for their retirement income, along with Social Security and perhaps a pension.
