Legacy planning goes beyond mere numbers, aligning traditional estate planning with a family’s goals and values. The process includes defining and expressing what wealth means to a family. It involves identifying the core values that bind the family, and in many cases it involves grooming children and grandchildren to be guardians of not just wealth, but also those values.
Investors in the U.S. are keenly aware of how managing taxes can help to build wealth—as evidenced by the trillions of dollars that we’ve invested in IRAs, 401(k)’s and other tax-sheltered accounts.
What too many of us fail to consider, however, is the need to remain tax-conscious even after we’ve built our wealth. For retirees seeking to preserve and appreciate their wealth, tax-savvy decisions are especially important.
One of retirees’ key tools for tax management is known as retirement withdrawal sequencing. In plain English, this refers to the order in which you make withdrawals from various account types to fund your retirement.
Those who have saved successfully often have a combination of taxable, tax-deferred and tax-free accounts. When that’s the case, proper planning about which accounts to tap first can allow you to defer a substantial amount in taxes while maximizing the opportunity for the remaining accounts to appreciate.
The other day I read a Bloomberg article that cited a recent survey suggesting that while the average U.S. employee calculates that he or she will retire at age 65, as a group the odds are around 50% that they will still be working at age 70. By the tone of the story, I would surmise this is less by choice and more by need.
At Janiczek Wealth Management, we are very fortunate to work with financially independent individuals and families, who have successfully put themselves in position to control their own destiny as it relates to their financial well-being. In the majority of cases, this independence did not simply happen overnight, but was the result of hard work and perseverance that eventually resulted in a major liquidity event or accumulation of wealth that changed the equation from “having to work”… to “choosing to work”. It is a very powerful edge to know that you are going to work simply because you want to, not because you have to.
Janiczek Wealth Management is proud to sponsor an Expert Panel on Life-Changing Liquidity Events. Experts from EKS&H, Minor & Brown, The Forbes MA Group, Business Enterprise Institute (BEI), Denargo Capital and Janiczek Wealth Management convened to share stories and best practice tips on creating “the perfect exit.”
The panel includes Joanne Baginski, CPA (partner EKS&H); Lisa D’Ambrosia, Director/Shareholder, Minor & Brown; Bob Forbes, President/Founder, The Forbes M+A Group; Joseph J. Janiczek, Founder/CEO, Janiczek Wealth Management; John Brown, Founder of Business Enterprise Institute; and Pal Berg, Co-owner of Denargo Capital. Kumar Dandavanti, Founder, Dandavanti Group is on the expert team but was excused due to overseas travel. Check out great video snippets, quotes, tips, article and an infographic at: www.janiczek.com/expert-panel/. Also includes resources from the Selling Your Business – How to Create the Perfect Exit event several of the Expert Team panel members put on in conjunction with the Denver Business Journal.
I recently presented to a room full of successful business owners on the topic of “ensuring your business is part of your retirement strategy”. What became immediately clear was the level of success these individuals have recognized as they continue building their respective companies… and ultimately their net worth. The stories shared had many similar financial characteristics including: record sales growth, impressive earnings, strong revenues, great cash flow, ability to reinvest back into their companies, as well as healthy distributions back to the owner that allowed for living an enviable lifestyle.
Stepping away from the discussion of their shared business successes, I inquired on how many owners had a concise vision of when they planned to step away from their business and what their ideal retirement (or post-business life) looked like. Roughly 50% of the room raised their hand with the majority planning to exit within 3 to 10 years. They shared visions of extensive travel, second homes, giving back to their communities, spending quality time with family, new hobbies, starting a new business, etc. The overriding goal was to be financially independent of course!
Our latest client appreciation event, the Cirque du Soleil performance of Kurios – Cabinet of Curiosities, was a big hit. We had hundreds of clients and friends from across the country join us in the “Grand Chapiteau” (big tent) celebrating our 25-year company anniversary in style.
Why did we select “curiosity” as the theme for this quarter-century milestone celebration? It was an easy choice. Simply put, we attribute a healthy dose of curiosity as a key ingredient behind our success and the success of the hundreds of high and ultra-high net worth clients we serve.
The idea of identifying a sustainable withdrawal rate in retirement is nothing new, yet the topic is getting more and more attention in recent times. I challenge you to type “retirement 4 percent withdrawal rule” into your preferred internet search engine. You will likely be surprised by the sheer number of results. Also, a quick scan of those results would lead you to believe that the 4 Percent Rule is no longer a valid concept in planning for retirement.