ConservativeChoose a rate of return from 1% up to 4%. Assumes a portfolio of 20% equity and 80% fixed income. Returns for the taxable portfolio reflect approximately an 85% exposure to ordinary income and short-term capital gains tax rates and a 15% exposure to long-term capital gains and qualified dividends tax rates each year. Qualified dividends are taxed at the long-term capital gains rate.
Moderately ConservativeChoose a rate of return from 1% up to 5%. Assumes a portfolio of 35% equity and 65% fixed income. Returns for the taxable portfolio reflect approximately a 74% exposure to ordinary income and short-term capital gains tax rates and a 26% exposure to long-term capital gains and qualified dividends tax rates each year. Qualified dividends are taxed at the long-term capital gains rate.
ModerateChoose a rate of return from 1% up to 6%. Assumes a portfolio of 50% equity and 50% fixed income. Returns for the taxable portfolio reflect approximately a 63% exposure to ordinary income and short-term capital gains tax rates and a 37% exposure to long-term capital gains and qualified dividends tax rates each year. Qualified dividends are taxed at the long-term capital gains rate.
Moderately AggressiveChoose a rate of return from 1% up to 7%. Assumes a portfolio of 65% equity and 35% fixed income. Returns for the taxable portfolio reflect approximately a 52% exposure to ordinary income and short-term capital gains tax rates and a 48% exposure to long-term capital gains and qualified dividends tax rates each year. Qualified dividends are taxed at the long-term capital gains rate.
AggressiveChoose a rate of return from 1% up to 8%. Assumes a portfolio of 80% equity and 20% fixed income. Returns for the taxable portfolio reflect approximately a 41% exposure to ordinary income and short-term capital gains tax rates and a 59% exposure to long-term capital gains and qualified dividends tax rates each year. Qualified dividends are taxed at the long-term capital gains rate.
CustomChoose a rate of return from 1% to 8%. Also choose the amount of exposure to long-term capital gains tax rates using the slider; the remainder will be exposed to short-term capital gains tax rates.
Investment risks:There are risks associated with fixed income investments, including credit risk, interest rate risk and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is more pronounced for longer-term securities. In general, equity securities tend to have greater price volatility. The market value of securities may fall, fail to rise, or fluctuate, sometimes rapidly and unpredictably. Market risk may affect a single issuer, sector of the economy, industry, or the market as a whole.
The portfolio exposure to different tax rates was determined by the RiverSource Fund Management Group
