Category: Financial Planning

As your net worth grows, so do the opportunities to refine your financial strategies. While no one-size-fits-all approach exists, certain planning recommendations become increasingly relevant as you reach new wealth milestones. It’s easy to stick with what’s worked in the past, but updating your strategy ensures that your plan remains comprehensive and aligned with your evolving goals. The right moves will also depend on your age, income, and personal circumstances.  Here are key strategies, albeit not a complete list, to consider as you hit different net worth levels during the asset accumulation phase of your life:  Net Worth: Under $250,000  At this stage, you’re laying the groundwork for your financial future. Building strong habits now will set the stage for long-term success. Your focus should be on saving, investing, and living within your means.  Net Worth: $250,000–$1,000,000  Now, you’re in a dynamic phase where family and financial growth go hand in hand. At this stage, whether you’re balancing homeownership, expanding your family, or continuing to build wealth, thoughtful planning is essential to achieving long-term success.  Net Worth: $1,000,000–$5,000,000  You’ve hit a significant milestone! As your net worth climbs, the importance of thoughtful planning cannot be overstated. This is the time

In today’s world, the landscape of financial responsibility is rapidly evolving. More and more, we are seeing baby boomers beginning to pass the torch of financial responsibility to their most trusted Gen X successors. For some, this may mean handing over the reins entirely; for others, it’s about collaborating and providing guidance to the next generation. This generational transition involves more than just numbers on a spreadsheet— it’s a profound shift in mindset, responsibility, and planning.  This collaboration often resembles a form of training—a process where the older generation educates the younger one about what they have, and how it all fits into their broader financial strategy and estate planning objectives.  Key Questions to Consider: Timing and Choice However, this shift begs several important questions: Who should be involved in this process, and when is the right time to bring them in?  Should only one child be involved, for instance, or should it be all of them?  The truth is that there is no one-size-fits-all answer. Every family’s situation is unique, and these decisions can be highly personal. However, what remains consistent is the importance of clear communication and thoughtful planning. Deciding who will take on financial responsibilities and when

Small business owners are often ideal candidates for one of the best kept secrets in retirement savings: the Cash Balance Plan. Not only does this allow you to reduce your taxes significantly, but it better prepares you for those very expensive retirement years. In fact, as of 2024, you could save up to an additional $275k a year, tax deferred, positioning yourself for a retirement benefit of up to $3.5 million! Recognize that each situation is unique, however, and it may or may not make sense for you to use a Cash Balance Plan. The value of implementing a plan like this can be measured, usually at no cost. Ask your financial advisor to help you locate a resource for this analysis. Generally, Cash Balance Plans are worth considering for sole proprietorships, corporations, partnership of corporations, partnerships, closely held businesses etc., if the following apply: What are Cash Balance Plans? Cash Balance Plans are a type of defined benefit pension plan. That is, they provide for a predetermined retirement benefit, either in the form of a stream of income or as a lump sum. This is distinct from the more common defined contribution plans—for instance, your 401(k), where only the

At Whelan Financial you’ve probably heard us say that we work with our clients’ other professionals. We do, as the need arises, collaborate with our client’s CPAs, estate planning attorneys, and the like, to execute immediate financial planning strategies on a year-over-year basis. Your Financial Needs As CFP professionals, it is our job to balance your short-term financial needs with your long-term financial goals. For instance, making sure your current spending habits are sustainable in retirement or foregoing tax deductions this year in favor of reduced taxes in the future. In order to advise you in this way, we construct complex financial plans that bring all of the component parts of your finances together in an analysis that extends not just from the current year, but through your life expectancy. Not only will it reveal how much you can expect to have remaining for loved ones or charities, it also informs us of issues that may occur down the road. For instance, years in which your income tax may spike, or when your heirs may be at risk for paying estate tax. The Service 360 Difference We realized that this data is not just important to the advice we give, but

It’s that time of year again, so before the holiday season takes over, let’s pause to ensure that your financial well-being is on solid ground. This end-of-year financial checklist is designed to help you safeguard your financial present and fortify your financial future. 1. Maximize 401(k) Contributions Your employer-sponsored retirement plan is perhaps one of the most powerful financial tools at your disposal. Maximize your contributions as much as possible and take full advantage of any employer match, if available. For 2023, you can contribute $22,500, or $30,000 if you’re over 50 years old. Check with your 401(k) service provider to see that you are on track to maximize your contributions by year-end or if you need to make additional contributions. 2. Take your RMD When you turn 73 the IRS insists that you take a minimum distribution each year from your IRAs and 401(k). This is because money in these accounts has not yet been taxed, so in turn the IRS imposes this Required Minimum Distribution, or “RMD”, to commence collecting taxes on these monies. A specific calculation involving the year-end balance in the account relative to your life expectancy is used to determine the amount you must take.