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Managing Your Taxes During (and before) Financial Independence Thumbnail

Managing Your Taxes During (and before) Financial Independence

A reflection by Wayne Wagner Jr., ChFC

Financial independence means different things to each one of us. For some it's simply maintaining a lifestyle that they've been comfortable with, and staying in the geography they're in.

For someone else it may be changing geography or driving a different kind of car. Perhaps it's living in such a way that they're able to leave wealth to organizations or institutions that they're really passionate about.

Whatever it means to you, managing tax liability through your years of financial independence is important. To add to that, this process needs to start years before you actually stop working. Here at Vizionary Wealth Management, we spend a lot of time working with our clients to manage taxes in a very efficient, effective manner throughout retirement. A process that starts years before you make that transition.

Leveraging Creative Retirement Savings Solutions (Backdoor Roth IRA's)

For starters, we're talking about things like maximizing their 401k and not just their contributions. We include contributing on an after-tax basis to do what some people have called the "mega-backdoor Roth IRA" opportunity. People who don't qualify to contribute to a Roth IRA can still build up substantial wealth accessible through a Roth IRA strategy that you implement during your working years.

Donor Advised Funds Maximize Charitable Strength

For other people, it will be using a donor-advised fund to get the maximum charitable bang for your buck while you're in your highest income-earning years. You can maximize your charitable strength and continue making the charitable contributions that will be your legacy years down the road, perhaps decades down the road.

Managing Your Tax Bracket with a Long Term Lens

During retirement, we talk with every client about partial Roth conversions to look for opportunities to convert parts of your IRA assets into Roth IRA assets and manage your tax bracket. And yes, working with your CPA on this process year after year can feel like tedious work, but financial planning isn't for the meek or the weak-willed. 

Making the Most of the Money You've Earned

Here at Vizionary Wealth Management, we're always here with perspective for the decisions ahead. More often for our clients, that means tax planning and tax strategies to help:

  1. Manage their tax liability now through years of financial independence
  2. Empowering you to pass on your hard-earned wealth to those you care about
  3. Seek to minimize the government's grubby hands getting on your wealth when you're no longer here

If this resonates with you, please feel free to give us a call and start the conversation about your dreams for your future. Here at Vizionary Wealth Management, we're always here with perspective for the decisions ahead.