Retiring for High-Net-Worth Individual: Safeguarding Your Assets with 5 Key Wealth Management Moves

by | May 7, 2024

Retirement is meant to be the golden years of life when you can relax, pursue passions, and enjoy the fruits of decades of hard work.

However, without proactive planning tailored to your financial situation, this ideal vision can fall short. This is especially true for high-net-worth individuals with sizable investment portfolios, business interests, real estate holdings, and importantly, complex tax scenarios.

That’s why retirement requires preparation if your wealth is going to fully support your envisioned lifestyle for 30 years or more. 

At Kreitler Financial, we believe that careful and calculated steps toward your retirement will prepare you to better withstand any financial storm. On that note, we specialize in designing fully customized retirement blueprints tailored to each client’s financial profile, personal passions and legacy aspirations.

With that said – while every next chapter in a person’s financial journey is unique, these five essential steps set the foundation:

Here are five essential steps every high-net-worth individual should take when planning for their later years:

1. Comprehensive Financial Assessment: Where Do You Stand Today?

Before charting the course ahead, you must first understand your current financial standing inside and out. This means:

  • Detailing all existing assets – including properties, investments, business holdings, retirement accounts, collectibles, and more – and tallying their current value. 
  • Tallying your income streams from salaries, investment returns, company profits, pensions, social security, and any other sources to project how much continuous cash flow they can reliably generate.
  • Accounting for all current and potential liabilities.

From this thorough financial picture, you can then evaluate your net worth, asset allocation, risk exposures, sustainable withdrawal rates, income sustainability, and many other key factors that shape tailored strategies around taxes, investments, estate planning, and lifestyle spending that help optimize the probability of never outliving your money. 

2. Ongoing Tax Optimization: Now and In Retirement

Taxes remain one of the biggest expenses for high-income and high-net-worth families. Minimizing them requires coordination across several key areas:

Income Planning:

Proactively planning how taxable, tax-deferred, and tax-exempt income flows into retirement. This includes projecting withdrawals from pre-tax accounts, initiating Social Security and pension streams, and strategizing Roth conversions.

Investment Placement:

Tax-efficient placement of assets across retirement accounts, taxable accounts, trusts, and other structures can lead to thousands in annual tax savings.

Estate Planning:

Lifetime gifting to heirs and efficient distribution of assets after death through wills and trusts can minimize total estate taxes. Important estate planning tools include ILITs, IDGTs, GRATs, QPRTs, and more.

Business Structures:

For business owners, choosing the right corporate structure, such as S-Corp, C-Corp, LLC, or partnership, is critical for income, payroll, and capital gains tax efficiency.

Property Holdings:

Managing ownership structures, cost basis considerations, 1031 exchanges, and primary residence exemptions for rental income and capital gains.

Charitable Giving:

Donor-advised funds, private foundations, and other charitable vehicles create tax deductions while fulfilling philanthropic goals.

Residency Considerations:

Relocating to no-income-tax states can provide substantial tax savings in retirement. However, this should not be the only consideration when determining where to live.

Additional tax optimization strategies for high-net-worth individuals include:

  • Maximizing annual tax-advantaged retirement contributions and implementing advanced strategies around 401(k), 403(b), 457, traditional IRA, Roth IRA, HSA, and other account types
  • Strategic timing of when deferred investments or assets get liquidated to minimize total taxes owed
  • Smart asset placement and realization strategies that balance short-term with long-term tax implications
  • Dedicated estate and gift tax planning to pass more wealth onto future generations

The overall goal is layered tax diversification and significant lifetime savings through coordinated expertise across tax planning areas tailored to high-net-worth seniors.

3. Investment Management: Balancing Returns with Risk Mitigation

Given today’s economic climate, the days of set-it-and-forget-it portfolio management are over for individuals seeking to successfully fund 30+ years of retirement. Prolonged market volatility, rising inflation, higher taxes, and increased longevity all bring material risks to sustainable income generation from invested assets.

Balancing investment returns while mitigating these risks requires a responsive, tactical approach, which means:

  • Highly customized portfolio construction tailored to each investor’s specific risk tolerance, goals, and liquidity needs rather than generalized asset allocation guidance
  • Diligent rebalancing back to personalized target allocations as market movements skew balances over time

The retirement investment strategies we provide at Kreitler Financial help HNW individuals get steady returns while guarding against key risks that can jeopardize income sustainability over long time horizons. This can allow wealth to stretch further and improve the likelihood that retirees’ portfolios endure throughout their later years.

4. Estate Planning and Wealth Transfer: Securing Your Legacy

Legacy planning is deeply personal and emotionally charged. It means making decisions today that truly reflect how you want your wealth distributed in the future.

This brings major questions around:

  • Who Should Inherit What Assets:

Determining which family members, friends, or institutions should inherit specific assets. This may involve dividing percentages between children, trusts for minors, donations to charitable foundations, etc.

  • When They Receive Them:

Choosing when each recipient should receive their inheritance – outright, staggered over time, or delayed until certain ages.

  • How to Minimize Estate Taxes:

Employing trusts, gifting, asset titling arrangements, foundation structures, and other tools to minimize estate taxes that can severely erode inherited wealth.

  • Business Succession Planning:

For HNWI business owners, developing a comprehensive succession plan detailing how ownership assets and leadership responsibilities will transition to the next generation.

  • Wills, Trusts and Directive Preparation:

Composing legally binding wills and trusts that accurately detail the desired asset distribution plan and inheritance instructions.

5. Lifestyle & Life Stage Planning: Define Your Retirement Vision

Retirement means vastly different things to different people. To truly capitalize on and make the most of your later years, you need to proactively define and plan for the personalized retirement lifestyle that brings you joy, purpose, and fulfillment.

This involves thoughtful consideration around:

  • Retirement Goals Setting:

Mapping out intended retirement activities, passions to pursue, locations to potentially relocate to, community and family time aspirations, and other lifestyle targets that define one’s vision for daily life in their later years.

  • Financial Strategies Alignment:

Rigorously stress-testing projected retirement spending plans to confirm adequate savings and income sustainability to support desired lifestyle aspirations. This may require additional wealth accumulation years in advance.

  • Surprise Cost Planning:

Proactively planning for and insuring against unexpected retirement costs like healthcare expenses, long-term care needs, major home repairs, adult children support, and other potential shocks to retirement spending. Key tools here involve Medicare analyses, long-term care insurance assessments, and building comprehensive healthcare directives.

  • Income Maximization Analyses:

Auditing and capturing all potential revenue streams in retirement, including delaying Social Security benefits to increase payments, securing pension and annuity payouts, and utilizing other advanced strategies to align reliable income to expenses.

Retirement success requires more holistic planning than basic wealth accumulation. It means putting one’s assets to work in the optimal ways at the opportune times to confidently realize your unique retirement vision without persistent worries over outliving your nest egg. Our guidance is focused on helping you achieve this financial security.

Let’s Start a Dialogue Tailored to You

Navigating through:

  • Tax minimization frameworks
  • Legacy and estate strategies
  • Healthcare insights
  • Lifestyle alignment
  • And complex portfolios

…With an eye toward lasting sustainability is no small feat – that’s exactly why you need to be careful with your wealth management.

We invite you to initiate a conversation about what true retirement means for your unique situation and how our custom strategies can help you secure the future you envision. To get this tailor-made financial blueprint, you can schedule a no-commitment session with us at Kreitler Financial.

Let’s uncover what’s possible – and profitable – when purpose-built retirement planning is made a priority early on.

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