Walen Financial Group, LLC is here to help you make better financial decisions. The investing models we employ are rooted in economic theory developed by Nobel Prize winning researchers and leading economists. You don’t have to dive deep into that theory to make successful investments, all you need is qualified coaching and expert advice, so you can develop a successful investing strategy yourself. We are here to help you transform your experience with money and achieve true peace of mind.

Wealth Management Through Proper Tax Planning

As has often been said, death and taxes are the only sure things in life. While we may be unable to do anything about the “death” portion of that statement, we can advise you about the second.
So, what does it mean to manage your wealth through proper tax planning? It simply means that you develop a strategy that minimizes your tax liability – in other words, what you owe in taxes. Tax planning is a necessary part of any financial planning because, at the end of the day, agile investors know it’s not about what you earn but what you keep that matters most to accumulating wealth.

When investing, portfolio management is key. It is essential to look at the returns of a particular portfolio and how it is taxed. A portfolio with a higher rate of return could also be taxed at a higher rate, meaning more money going to Uncle Sam and less in your pocket. This loss of money can be eliminated by creating a tax-efficient portfolio and utilizing tax-efficient strategies such as tax-loss harvesting, tax-efficient withdrawals, and spreading investments across various account types with different taxability.

Along with the retirement plan at your place of employment and the portfolio you create with your financial advisor, many other investment vehicles allow you to save for various goals while taking advantage of the tax relief they provide. For example, if you have children for whom you wish to help pay for college or private schooling, a 529 savings plan allows you to save for those education expenses, the money grows in a state-sponsored investment account, and then you can withdraw the money tax-free for qualified education expenses. Or, if your income increases considerably, you may benefit from gifting some money through a Qualified Charitable Deduction (QCD). Being creative and innovative about your investments and how to lessen the taxes they incur is a vital part of smart financial planning.

The thing about tax laws is that they constantly evolve. Keeping up with and adapting to these changes is essential. Rules like the age at which you must begin taking your Required Minimum Distribution (RMD), IRA contribution limits, and the amount you can put into a Health Savings Account (HSA), for example, have all changed more than once in the last five years. These can potentially have significant long-term and short-term tax implications. For these reasons, it is vital for income planning advisors to stay updated on the latest updates and keep you informed.

As financial advisors with our client’s best interests in mind, our fundamental goal at Walen Financial Group, LLC is to educate our clients about the various facets of investing. A portion of that education is about how taxes can have a harmful impact on your financial goals. We aim to help you build a portfolio that considers the detrimental effects of taxes and to lessen them where possible so that you can accumulate more wealth and financial freedom. Contact us today to set up a free, no-obligation financial consultation.