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Comment by ericd | Hacker News Reader

The problem with TLH as justification is that with assets with a positive EV (and because of inflation), after 5-10 years, you probably won't have many losses to harvest, but you'll still be paying that fee.

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The main problem is that TLH tops out at $3,000/yr in losses. After that the benefit doesn't scale with the fee.

The main problem is that TLH is irrelevant in tax-free/deferred retirement funds, which is where you should be sticking your savings if you haven't maxed them out, which is the situation of most people who use these robo services.

Yet another problem of TLH is that you must have all your investments with Betterment to ensure you don't trigger the "wash sale" rule. (Alternatively, you can handle it yourself manually, but that negates most of the benefit of having Betterment from a TLH perspective.)

That's more or less true only if you are retired & not re-investing dividends (not regularly purchasing new, high-basis lots).

The key problem is the one that loeg mentioned: on a $500k+ account you will likely be paying >$1k in fees for a ~$1k/yr tax savings. To make matters worse, the tax savings does not increase with inflation, but the fees do.

Right, over time new purchases generally become less and less significant relative to the asset value of your account. But yeah, the reinvestment and new investments can still be TLH'd.

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