Your home is paid for; the kids are out of college; your credit cards are paid off monthly; your investments are solid; you have a nice little nest egg, and some expendable income. In a nutshell, your financial life is more or less stress free.
Over the years your financial path has changed as your life did. From that first time homeowner budgeting every penny to the person you are today. Your investments portfolio expanded and diversified as needed to meet obligations and desires. That remains true as you move closer to retirement.
Once again, your changing priorities demand changes in your financial strategy. And that leaves you with a whole new set of unknowns … and why you need a fiduciary Wealth Management Advisor.
Four Common Reasons Why Executives Need a Financial and Wealth Management Advisor
ISOs, RSUs, and Tax Implications
You’ve got stock options such as an ISO (Incentive Stock Option) from your employer granting you the right to purchase a certain number of shares at an established price based on your performance and/or a RSU (Restricted Stock Units) earned by you through your employer’s vesting plan and distribution schedule when you’ve met performance certain milestones or years of service. You’ve more than earned these perks. They are cash in the bank –but with what tax implications?
Remember, you were able to buy at below share value and didn’t have to report the options to the IRS upon receiving them or exercising your options. The accounting exception being you had to report the bargain element as taxable compensation for the Alternative Minimum Tax (AMT) purpose in the year you exercise the options.
What was a big plus then could now be a problem. And a hefty one when it comes time to cash out and reallocate those dollars.
You learned long ago the importance of diversifying your investment portfolio; do you know that your tax allocation also benefits from diversification?
Balancing Retirement Savings and Current Consumption
At this point, you have probably invested the maximum allowed in your IRA(s) and ROTH IRA(s) and putting cash into CDs which currently have a pitifully low rate of return seems foolish. You wisely do not want to invest in high risk, albeit potentially high gain stocks as you edge closer to retirement. Dimensional Fund Advisors (DFA) funds offer the safest path for increasing retirement savings at the least cost.
That said, it’s time to budget for what you want to do during retirement. This includes an honest appraisal of how many more years you are willing and happy to work; your health; the market as it relates to your line of business, and any number of other factors. Basic to your successful plan is to determine:
This is where financial modeling comes into play. At Hamilton Financial Planning we extrapolate the numbers for you, explain the optional tactics to get you where you want to be … and back up our suggestions with hard facts.
Estate Tax Planning
This is the final step in reading your financial plan as it allows your family to keep more of your hard earned wealth. After all, the IRS won’t appreciate your efforts nearly as much as your loved ones will.
Estate taxation laws are some of the most convoluted ones on the books – by the IRS’s own admission. Any executive level earner must have a financial advisor skilled in dealing with the ever changing rules and regulations in order to ensure your wishes are carried out and done so to the letter of the law.
Over the years, Hamilton Financial Planning has advised and helped people build and manage wealth; our participation in your estate planning will ensure your wealth continues through the next generations of your family and in accordance with your intents.
Hamilton Financial Planning, with offices in Austin and Houston, TX and Charleston, SC, is Fee-Only; this means you know in advance what your quarterly bill will be. We never charge a commission or sell you products so there are no hidden costs to surprise you. Every penny you earn from your investments made through Hamilton Financial Planning goes directly to you and bringing your goals and dreams closer to reality.
If you’re unsure if you have enough saved to retire; when you can afford to retire, or how much more wealth you need to build in order to retire, we should talk. HFP is offering a no obligation 30 minute planning session designed to provide you with a high-level view of your financial forecast to answer these key questions.Schedule a consultation TODAY!
to find out if HFP is a good fit for helping you meet your goals.