Tax Planning

If you can grasp the concept that the decisions you make today affect you down the road, you’ve essentially got the nuts and bolts of effective tax planning. I always advise my clients to keep one eye on the distribution phase during the accumulation phase. 

Depending on your situation, we’ll work to allocate your investments in different buckets, timeframes, and/or for different purposes based on your goals and objectives. Unfortunately, Uncle Sam’s always going to get his piece too. This is why diversification is key. You’ll either be paying now or paying later, since pretty much everything is taxable at distribution. However, business owners are also subject to different rules. 

People often assume that when they’re retired they’ll need less money. However, this is definitely not the case. As I like to share with those planning for retirement, when you’re retired, every day is Saturday. You have endless time now to shop, dine out, go on vacations, and maybe even spend time with the grandkids. 

As a business owner, would you rather be contributing $50,000+ toward your retirement every year or $10,000? 

Let’s use another one of my clients as an example. I have a husband-wife business owner team. While they would like to contribute to a Roth IRA, (because there’s no income tax on Roth monies upon distribution at age 59 ½), their adjusted gross income is over the contribution thresholds. Sound familiar? We can help turn this around.

This couple like most was also very concerned about taxes, so I sat down with the couple and their two CPAs. We were quite thorough, and we had gone over all of the details of an ownership transition, succession planning, and more. My clients were so overwhelmingly concerned with minimizing a potential tax burden that they were missing the bigger picture. We were able to use their status as business owners to allow them to contribute to a Roth.

While the tax angle shouldn’t be the only factor in decision-making, it should certainly figure into the bigger picture. For business owners, we need to look down the road. Allocating retirement monies in different buckets allows for solid tax planning, so you’re ahead of the game.

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Contact St. Croix Advisors today to learn more. We are located in Hudson, Wisconsin, and serve a number of areas in Wisconsin including Hudson, Eau Claire,New Richmond, and River Falls, as well as the St. Paul/Minneapolis area in Minnesota. Our services include wealth management, retirement planning, financial planning, estate planning, asset protection, life insurance, long-term care insurance and expenses, to mention a few areas. Our President, Brett Anderson, can assist you with any questions you may have prior to scheduling your first appointment. Brett can be reached at 651-337-1919 or   .