How We Help: The Busy Professional
Written By: Ryan Rink, CFP®, EA, ChFC®, CLTC®
For many professionals, managing the complexities of their career, family life and personal goals can often leave little time to focus on their financial future. While it’s tempting to manage your finances on your own, the reality is that financial planning is more than just investing and saving. It requires a multi-layered, ongoing strategy that evolves with your needs. At Shakespeare Wealth Management, we specialize in helping busy professionals navigate this complexity with tailored solutions designed to give you peace of mind and free up your valuable time. Below are some examples of financial planning items we’ve helped professionals with:
Review Cash Flow and Set Up an Automatic Savings Plan
A key aspect of financial success is understanding your current cash flow. We review and analyze your income and expenses to ensure you’re not only living within your means, but also maximizing your savings potential. After analyzing your cash flow, one of the first actionable steps we take is setting up (or optimizing) an automatic savings plan. Whether it’s increasing your 401(k) contributions or diverting a portion of your monthly income into a tax-advantaged account like a Roth IRA or Health Savings Account (HSA), we ensure your savings are consistent and aligned with your retirement goals.
Example: Client was maximizing 401(k) contributions. However, they were in the highest tax bracket and deferring all contributions to the Roth bucket. We switched contributions to pre-tax and created a plan to annually fund a backdoor Roth IRA. Directed client to start maximizing their Health Savings Account and invest the funds for retirement health expenses. This provided a tax deduction now, tax-deferred growth and tax-free distributions when used for qualified health expenses in retirement.
Tax Planning
We coordinate with your accountant/CPA on tax planning strategies each year. We want to ensure you pay the appropriate tax amount throughout the year to avoid potential penalties. We look for tax planning opportunities, such as Roth conversions and gain/loss harvesting. We’ll also examine your current investment portfolio to ensure it is not only diversified, but also tax-efficient.
Example: Client solely held mutual funds in their taxable brokerage account, which were paying out large capital gain distributions each year. We created a tax-efficient plan to sell out of these holdings and transition into ETFs, saving the client thousands of dollars in taxes each year. Coordinated with the client’s CPA and discovered there wasn’t enough withholding from paychecks, so we helped establish an estimated tax payment schedule to prevent underpayment penalties.
Optimize Stock Option Plans
For executives with stock options, we provide guidance on when to exercise these options and how to diversify holdings to reduce concentration risk. We also help navigate the tax implications associated with exercising and selling these options.
Example: Directed client to exercise non-qualified stock options, strategically selling 50% of holdings to diversify portfolio and reallocate funds into lower-risk investments, while minimizing tax impact.
Review Insurance Coverage
Protecting your assets is a critical part of wealth management. We’ll assess your current insurance policies (life, disability, and long-term care) and recommend updates to ensure adequate protection for you and your family, taking into account any gaps or outdated policies.
Example: Client had existing life insurance coverage of $2,000,000. We ran an analysis and determined the client was underinsured by $1,000,000. We made a referral to an independent life insurance agent to assist the client in purchasing an additional term life policy. While reviewing coverage, we also noticed that all $2,000,000 of the existing coverage was through group policies with the current employer. If the client were to change jobs in the future, they could lose the insurance coverage. We worked with the same life insurance agent to take out an individual life insurance policy to ensure he wasn’t subject to losing coverage if he decided to leave the employer down the road.
Estate and Legacy Planning
We help formalize plans to ensure your estate is managed efficiently and transferred to your beneficiaries according to your wishes. This might involve setting up or revising your will, creating a revocable living trust or structuring charitable donations in a tax-efficient way. For many executives, leaving a lasting legacy for their families is a key priority. We assist with shaping a long-term estate plan to transfer your wealth according to your wishes, while minimizing taxes and complications.
Example: Client had no estate planning documents in place. We made a referral to a qualified estate planning attorney, who drafted a full estate plan (Revocable Trust, Wills, Powers of Attorney, etc.) to meet the client’s wishes if something were to happen. We sat in on meetings with the attorney and helped facilitate account beneficiary changes once the documents were signed.
Streamline Charitable Giving
If philanthropy is part of your financial strategy, we help create a tax-efficient charitable giving plan such as using a donor-advised fund (DAF) or directly gifting appreciated stock.
Example: Client was writing $500 checks each month for donations to their church. They had a large position of Apple stock in their brokerage account with a substantial gain. We set up a donor-advised fund to contribute $30,000 of Apple stock (5 years’ worth of donations), maximizing their tax deduction now while in their highest earning years.
Education Planning
For executives with children (or grandchildren), education planning is a critical component of financial strategy. We help set up and maximize contributions to tax-advantaged 529 savings plans, which allows for tax-free growth when used for qualifying education expenses. This ensures you’re prepared for the rising costs of education while taking advantage of favorable tax treatment.
Example: Client had two children, ages 8 and 6, and had no current plan on how to pay for four years of undergraduate tuition. We discussed a funding plan based on their goals and opened 529 plans for both children. The accounts were opened at Edvest, one of Wisconsin’s state-sponsored plans, so they were able to qualify for a Wisconsin state tax deduction.
Partnering with Shakespeare Wealth Management allows you to focus on your career and personal life, while we take care of the complexities of wealth management and long-term financial planning. Contact us to schedule a consultation and take the first step toward achieving your financial goals.