High Net Worth Investors

Taxes, taxes, taxes…

These people are consistently the target of numerous wealth eroding forces, typically in the form of taxation. With the largest target on their back, minimizing taxes is often one of their greatest challenges. There are many forms of tax that these people may be subjected to and without the correct planning strategies, they end up right in the crosshairs, left to pay more taxes than most Americans could ever imagine having to worry about. However, the challenges do not stop at there. Many high net worth investors while focused on taxes fail to properly plan for things that can destroy the financial comfort they have worked to so hard to create. For those who are still working and are in the accumulation phase of their lives, the ability to create income is frequently their most valuable asset; however, those in retirement often fail to create a strategy to make the trip down the proverbial mountain they have worked so hard to climb by mapping out what obstacles may come up and how to overcome them.

• Losing spending power by paying unnecessary taxes
• Making the IRS an unintended beneficiary of your hard work
• Underestimating the future cost of medical expenses in retirement or overestimating your ability to survive a financial surprise
• The impact of high inflation on retirement income
• Underestimating life expectancy
• Switching from a strategy of wealth accumulation to wealth maintenance

There are two reasons creating large amounts of wealth are important to most: to maintain a standard of living before and in retirement, and to create a legacy or to pass on wealth to another, whether to the next generation or to charitable organizations. While the goals can be easy to identify, the things that could get in the way of our goals can be difficult to foresee. While risks associated market volatility, inflation, taxability, liquidity, and currency are widely discussed, other things should also be considered. Financial, legal, and tax planning coordination becomes increasingly important for those with larger net worths. Typically, these individuals have more “irons in the fire” as it relates to accounts, policies, and trusted advisors. It is essential that all of these areas stay coordinated and integrated to ensure no one piece is working against the other. While diversification can be appropriate as it relates to investments and even advisors, this creates a gap of communication which is essential to keep your strategy on track.