Throughout your life, you face many financial considerations and goals. While it can make sense to address one specific objective or phase as the occasion arises, your financial plan works best when it syncs with all of your goals—your short-term, mid-term, and long-term objectives.
In fact, doing so can help mitigate potential issues, lessen tax liabilities, and enhance your opportunities for growth.
Tremont Street Financial Group provides comprehensive planning solutions that address all of your concerns and seek solutions that align with all of your needs.
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In building wealth, many consumers don’t think about, or wholly appreciate, the impact taxes can have on their portfolios. In the U.S., the overall financial environment invokes higher taxes, especially when it comes to financial products. This is why it is important—now more than ever—to incorporate tax planning into your portfolio strategies and all of your financial decisions.
Misunderstanding your tax burden can lead to unnecessarily losing significant portions of your assets, which, if you are accumulating toward retirement, can drain on precious resources.
Although taxes are unavoidable, there are strategies, rules, and processes that allow you to keep more of your accumulated wealth so that your retirement resources stretch longer and help you achieve your ideal quality of life.
Seek Out Tax-Advantaged Products
Many financial products, such as fixed interest annuities and cash value life insurance policies, provide tax-deferred growth. These types of financial products provide opportunity for greater growth, as the accumulated value within these accounts is generally not taxed until distribution. This may not seem like that big of a difference, but deferred products allow for compounded growth, so that even if the amount taxed upon distribution seems like a big portion, it will likely be a smaller proportion relative to the larger accumulated value.
Structure and Sequence The Pieces of Your Portfolio
You may have multiple types of assets currently, such as investments, bonds, CDs retirement accounts, annuities, life insurance and so forth. Not only it is prudent to consider when to trigger these accounts for distribution but it is also important to structure and sequence your accounts as you pivot into retirement. This tax minimization strategy can be somewhat complicated so it’s best to seek out a trusted financial advisor, such as Tremont Street Financial Group, who can design a financial plan that helps you maximize growth and lessens the impact of taxes.
The main task with retirement planning is to minimize risk while accumulating a robust and sustainable source of retirement income. As time is a crucial aspect of the process, you should ideally begin retirement planning as early as possible.
But good retirement planning goes beyond saving early and often. If you have concrete figures—i.e. I can put away X amount over X years and retire at X time—you still may not be structured for a long-lasting retirement portfolio due to longer life expectancies, inflation, taxes, and market volatility. Even individuals who establish plans early in their career may find these four issues affecting their retirement prospects. Especially if they are overexposed to the market. These factors are causing some of this generation’s retirees to outlive their money or reduce their quality of life during retirement.
This is probably the most pressing question consumers have regarding retirement planning. Although it seems like a simple question to answer, it can be a difficult one because of the many variables and factors that come into play with building a successful financial plan. Think about how much you can save. How much will you have available to allocate toward any number of retirement programs and financial instruments? When do you want to retire?
A simple answer to the question of “how much to save for retirement” is save as much as possible. The better question and better approach, however, is “how can I use my available resources to build a retirement platform that can not only efficiently ensure financial independence during retirement but make it unlikely that I will outlive my income.” This is a far more complex question and approach and demonstrates why seeking out the services of a retirement advisor is particularly helpful in the retirement process. In addition to helping you figure out a viable retirement timetable and sourcing, a retirement advisor can help maximize your retirement income with many tailored solutions and structures.
As you can imagine, there are numerous products and solutions to achieve many financial objectives and retirement goals. What will be a fit for you and your household will depend on your unique situation and desired quality of life during retirement. For some consumers, using cash value life insurance policies, such as universal or whole contracts, may be a great solution to provide a death benefit and accessible cash during life. Consumers may also want to consider deferred annuities, such as fixed or fixed indexed, to provide a source of income that cannot be outlived, with certain riders. There are also employer-sponsored plans like 401(k)s and traditional individual retirement accounts (IRAs) to consider as well.
Within these product categories, there is much variety. So even if you have determined that a product will be a great fit for your retirement priorities, you have to consider the picture as a whole and how each available account will function within your larger retirement portfolio, less you shortchange or limit your financial standing during retirement. This is where consulting with a trusted, highly rated retirement advisor can be a great advantage. A retirement advisor is able to develop your products mix from the ground up, help you manage your retirement plan as it matures, and to provide ongoing solutions as the economic environment evolves over time.
This is another pressing question individuals have about retirement. Like “how much do I need to retire” the answer to this question is positioned within a constellation of unique factors indicative to your situation and sustained earning power.
Begin by breaking down this heavy question. When would you like to retire? What is your ideal time horizon? And then ask yourself, based on what you know about your finances, “is this reasonably achievable?” It may not be and that’s why having an ongoing consultation with a retirement advisor is particularly helpful. Through the guidance of a retirement advisor, you may find that your ideal retirement age is achievable through leveraging assets or you may find other acceptable alternative scenarios.
This may touch upon an uncomfortable aspect of retirement planning because it invokes you to not only consider your death but to also have a rough sketch on when it will occur. The good news: as a population, life expectancy is ever increasing. The bad news: this means that retirement income now has to stretch longer, in some cases decades longer. If you are unsure on how to wrestle with this topic of retirement planning or if you are worried that you may outlive your retirement resources, you may want to consider products with a lifetime income rider.
Serving the larger Houston area, Tremont Street Financial Group is your source for retirement planning, financial planning, and more.
Email email@example.com or call 281.245.3326 now to explore your options.
Along with transferring wealth to beneficiaries—like a spouse, child, or other family members—you may want to consider charitable giving. At its simplest, charitable giving involves appropriating a portion of your accumulated wealth to an organization that matters to you. This is a great way to support the cause or causes you value while leaving a lasting financial legacy that often keeps these organizations viable.
Charitable giving is not only a way to fulfill your philanthropic desires. It can be used as a planning tool and provide you with benefits such as tax deductions, avoidance of capital gains on highly appreciated assets, and minimizing (or eliminating) estate taxes upon your death. There are even certain charitable giving strategies and solutions that allow an income stream accessible during life. With an increasing tax environment expected in the U.S. in the coming years, there may be many compelling reasons to incorporate philanthropy into your financial and estate planning.
Although the basic idea behind charitable giving strategies is simple, the mechanics and structuring are not. The advisors at Tremont Street Financial Group can help you explore your charitable giving options as they relate to your retirement and financial plan, as well as how they connect with your legacy goals.
Email firstname.lastname@example.org or call 281.245.3326 now with all your charitable giving questions.
While the rewards of owning and operating a small business can be great, it’s no secret that it’s hard work. Tremont Street Financial Group understands what’s at stake for small business owners like you. This is why we offer a comprehensive menu of small business solutions including:
Risk management refers to a number of strategies and solutions aimed at reducing liability and risk. Because they often attend to tasks of daily operations, business owners often overlook the risk management aspect of running their company. However, risk management is a valuable process, one that can help to secure the longevity, profitability, and viability your business.
A buy-sell agreement is structure between partners and shareholders that outlines how ownership stakes of a business are transferred upon a qualifying event. Typically, the event will be death, but it can also encompass retirement and disability. Life insurance is regularly used to fund the underlying buy-sell structure. When/if a qualifying event occurs, the remaining partners apply the life insurance benefits to acquire the departing partner’s ownership share.
Many businesses—especially those at the small business level—depend on a few key employees. Should a key employee depart because of death, retirement, or disability, the continued viability of the business may be threatened. A key-person insurance structure mitigates the operational and financial stress that results from the loss a key employee. In this arrangement, the business is both the purchaser and beneficiary of a life insurance policy taken out on a key employee.
As a small business owner, you may feel that retirement solutions—such as the kind you would find with a larger, established business—are out of reach for yourself and your employees. However, there are numerous solutions available to you that can help build a retirement source.
While you focus on the life of your business, consider your exit plan. What does this mean? An exit plan simply outlines what will happen to your company when you retire and how you redeem value out of what you have built over the years. Will you sell the company? Transfer it to a key employee or family member? Your choice of exit plan will involve documentation and tax considerations. We are here to guide you through your options
If leaving a legacy is a concern for you, you should incorporate wealth transfer planning into your overall financial plan. Here are some things to consider:
The assets that help you have you long-lasting retirement may not be may not be the best instruments for your estate. Annuities, IRAs, Certificates of Deposit, and more, may be subject to income and estate taxes that can significantly erode the wealth that you’ve worked hard to create.
With estate taxes set on the excess of $11.4 million per individual in 2019, it may seem that estate planning is only a concern for the wealthiest of the wealthy. While most estates won’t be subject to this current estate tax rate, individuals still need to think about the impact of taxation on their assets issued to beneficiaries. This is because received assets will generally be subject to ordinary income tax, which can whittle significant amounts away from the accumulated value of an estate. Additionally, some states may levy estate or inheritance taxes.
When an individual dies, their estate generally will have only nine months to settle federal estate taxes. If an estate is comprised of a mix of cash assets, physicals assets, and other types of assets, this can be difficult to satisfy and may result in lost value. For example, it may be tough to find someone to purchase a highly valuable property in the short span of nine months, which may result in settling for lower sale to gain liquid cash for estate tax settlement.
Beyond the point discussed above, physical assets can be hard to transfer to multiple beneficiaries. How would you—for example—split the value of a tract of land, a business, or real estate amongst your heirs?
The most common type of will among married couples provides for all assets to pass to the surviving spouse, generally with the understanding that at the surviving spouse’s death, the remaining assets will pass to the couple’s children. In blended families, however, problems can arise when the surviving spouse then leaves the remaining estate to his or her biological children, potentially disinheriting the children of the first spouse to die. Working with a qualified estate planning team, there are steps that can be taken now to help protect the interests of both the surviving spouse and children from both prior and current marriages. In the case of a blended family, it’s particularly important that all components of the estate plan be carefully reviewed in order to eliminate any conflicts between the components.
Charitable giving is not only a way to fulfill your philanthropic desires. It can be used as a planning tool and provide you with benefits such as tax deductions, avoidance of capital gains on highly appreciated assets, and minimizing (or eliminating) estate taxes upon your death. There are even certain charitable giving strategies that allow for an accessible income stream during life.
Life insurance is a popular estate planning tool for a number of reasons.
• It can provide liquid cash to settle estate tax issues
• If the death benefit exceeds the total premiums paid, this gain generally is received free of income tax.
• By giving up ownership of the policy, the proceeds may be estate tax free. (Irrevocable Life Insurance Trust, ILIT)
Do you have questions about wealth transfer, estate planning, or other financial planning areas? Email email@example.com or call 281.245.3326 now to explore your options.
Individuals have many questions about their Social Security benefits and are often unaware of the issues or considerations that may affect their retirement outcome. As you probably already know, Social Security can involve complex rules. As such, committing to a plan or decision without knowing the full scope of your actions can cause you to lose out on money.
When it comes to Social Security and Retirement Planning, there are two very important, and seemingly contradictory, ideas:
You shouldn’t rely solely on Social Security for retirement income; but
Social Security is an asset and should be managed as such.
For many people, the latter will mean employing any number of Social Security Maximization strategies. While every person’s situation is unique, with their own specific goals and financial considerations, it may, in many cases, be beneficial to delay triggering Social Security benefits. Because what will be appropriate for you ultimately depends on several factors specific to you, it is to your advantage to work with financial professionals that are knowledgeable with how Social Security Planning.
Tremont Street Financial Group can guide you through your Social Security options. We can help you answer the following questions:
• How are my benefits calculated? What age should I apply for Social Security benefits?
• How can I maximize my benefits and make them relevant to my retirement goals?
• What are the advantages and disadvantages of waiting until after full retirement age to claim Social Security?
• How can Social Security provide the most for my spouse in life and at my death?
• What about COLA’s (cost of living adjustments)?
• How can I properly coordinate my benefits with other retirement assets?
• What if I want to work in retirement?
• What are innovative strategies for maximizing benefits with my spouse?
• To find out if something is missing in your current financial planning contact us today.
Email firstname.lastname@example.org or call 281.245.3326 now to explore your options.