The easiest option is to have zero assets. Assuming that is not your aspiration, there is a 2nd option that really focuses on asset location.
Asset location is the process by which you place assets in the 3 primary locations (taxable, tax-deferred, and tax-free).
For your taxable account, this is your emergency fund (checking, savings, etc..).
Your tax-deferred account is your pre-tax retirement accounts or non-qualified accounts that have untaxed gains. These dollars will be taxed as ordinary income upon distribution. Ideally, you would have enough money in this bucket to withdrawal up to the standard deduction amount and no more. You have to keep this account small enough that RMD’s (required minimum distributions) would not exceed the standard deduction.
Finally, the tax-free bucket would hold the balance of your investable savings. The tax-free bucket would typically consist of Roth accounts, Health Savings Accounts, Cash Value Life Insurance, and Municipal Bonds. Note that all 4 of those tax-free accounts have exceptions and situations where there could be taxes so you must understand how to best utilize those savings vehicles.
Information in this material is for general information only and not intended as investment, tax, or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.