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Tax Loss Harvesting Break-Even Age Calculator

This calculator estimates the age at which reinvested tax savings from a harvested loss equal a simplified future tax cost on the deferred gain. It is designed to answer a narrow timing question: how long the current tax benefit must compound before it catches up with the assumed tax liability that has been pushed into the future.

Because tax-loss harvesting outcomes depend heavily on tax rates, realized gains, replacement securities, and eventual disposition, the page uses rates you supply rather than embedding tax brackets. The result is a scenario break-even point, not a statement that harvesting is appropriate for a particular investor.

Calculator inputs

years
$
%
%
%
Result
—
Estimated break-even age
Years to break even—
Current tax benefit—
Modeled future tax cost—

1. Enter your current age
This anchors the break-even time to an age rather than only a number of years.

2. Enter the harvested loss
Use the loss amount whose tax timing you want to evaluate.

3. Set the two tax rates
The current rate values the immediate tax benefit; the future rate values the deferred tax cost.

4. Add a reinvestment return
Use the annual return you assume for the current tax savings.

5. Compare age and years
If the current benefit already exceeds the modeled future cost, break-even is shown at the current age.

Years to break even = ln(Future tax cost ÷ Current tax benefit) ÷ ln(1 + return); Break-even age = Current age + Years

Current tax benefit = loss × current rate, and future tax cost = loss × future rate. When the current benefit is already at least as large as the future cost, the model treats break-even as immediate.

What the result means

The break-even age is the age at which compounded current tax savings equal the assumed deferred-tax cost in this simplified comparison.

This does not model wash-sale disallowance, tax-lot changes, annual loss limitations, or replacement-security performance.

Given: age 42, harvested loss $20,000, current rate 20%, future rate 30%, savings return 6%.

Calculation: Current benefit = $4,000. Future cost = $6,000. Years = ln(6,000 ÷ 4,000) ÷ ln(1.06) ≈ 6.96 years.

Result: Break-even age ≈ 49.0.

Why can break-even be immediate?

If the current tax benefit is already equal to or larger than the modeled future tax cost, no compounding period is required in this narrow model.

What return should I use?

Use the return assumption for how the tax savings would actually be invested or retained. A lower assumed return pushes a non-immediate break-even farther out.

Does age affect the mathematics beyond labeling the date?

The core equation solves for years. Current age simply converts that duration into an estimated age.

What happens if the future tax rate is much higher?

A larger future tax cost increases the amount of compounding needed, which generally moves the break-even age later.

Is a younger break-even age automatically better?

Not necessarily. The model omits investment substitution effects, transaction costs, wash-sale issues, and broader tax planning considerations.