Everyone, no matter where they are in life, needs a financial plan. Let Oak Street Advisors show you the power of personalized, fee-only financial planning.
Financial planning can be confusing. Many people are confused by the term because they have been offered a "financial plan" by an insurance agent or commissioned advisor as a means of selling them a product.
We do things differently -- as the typical financial plan we build for new clients are 50 to 75 pages long that cover everything from the expected investment recommendations to incorporating your employer benefit offerings and reviewing your personal liability insurance policies.
In our experience, our tailored, hand-written financial plans are likely much different than what you may have received in the past. The following scenarios detail how our financial plans have added value to our clients' finances over the last 20+ years.
We do things differently -- as the typical financial plan we build for new clients are 50 to 75 pages long that cover everything from the expected investment recommendations to incorporating your employer benefit offerings and reviewing your personal liability insurance policies.
In our experience, our tailored, hand-written financial plans are likely much different than what you may have received in the past. The following scenarios detail how our financial plans have added value to our clients' finances over the last 20+ years.
RETIREMENT, HEALTHCARE & TAX PLANNING
Bill and Rebecca were soon-to-be retirees still earning high wages. They came in looking for a roadmap into retirement that covered everything from income tax planning to investment management and private healthcare insurance planning.
Rebecca works for a nationally known corporation and Bill owns his own business. Rebecca planned to retire before Bill and was worried he would be left without proper health insurance prior to reaching Medicare eligibility.
We worked with Bill and Rebecca to determine an appropriate risk-based asset allocation, retirement spending bandwidth, and strategies to optimize the inheritance left to their sole child and grandchild. Further, we were able to reduce Bill’s self-employment income via tax planning so that he qualified for the maximum level of Qualified Business Income (QBI) deduction possible. We also helped Bill enroll in an appropriate private marketplace health insurance plan with a tax-deductible HSA to cover his insurance needs prior to Medicare eligibility while also further reducing their annual taxable income.
Rebecca works for a nationally known corporation and Bill owns his own business. Rebecca planned to retire before Bill and was worried he would be left without proper health insurance prior to reaching Medicare eligibility.
We worked with Bill and Rebecca to determine an appropriate risk-based asset allocation, retirement spending bandwidth, and strategies to optimize the inheritance left to their sole child and grandchild. Further, we were able to reduce Bill’s self-employment income via tax planning so that he qualified for the maximum level of Qualified Business Income (QBI) deduction possible. We also helped Bill enroll in an appropriate private marketplace health insurance plan with a tax-deductible HSA to cover his insurance needs prior to Medicare eligibility while also further reducing their annual taxable income.
DYNAMIC RETIREMENT WITHDRAWAL STRATEGIES
The Bradford family came for help managing the taxation of their large tax-deferred Rollover IRA assets. They had rental income, pension income, and were soon to start taking Social Security benefits. They were worried that if they did nothing now, they’d be forced to start taking Required Minimum Distributions in ever-elevated tax brackets.
After completing their financial plan, we provided the Bradfords with a lifetime tax and cashflow plan which incorporated all income sources, retirement spending needs, IRMAA premium increases, and current and future tax bracket projections. The resulting strategy projected to produce hundreds-of-thousands in lifetime tax savings.
Further, the tax planning implemented reduced their RMDs, reduced some of the negative aspects of the SECURE Act on their heirs, and provides lifetime tax-free growth and withdrawals.
After completing their financial plan, we provided the Bradfords with a lifetime tax and cashflow plan which incorporated all income sources, retirement spending needs, IRMAA premium increases, and current and future tax bracket projections. The resulting strategy projected to produce hundreds-of-thousands in lifetime tax savings.
Further, the tax planning implemented reduced their RMDs, reduced some of the negative aspects of the SECURE Act on their heirs, and provides lifetime tax-free growth and withdrawals.
SMALL BUSINESS RETIREMENT & TAX PLANNING
Sally is a self-employed real estate professional with annual earnings well in to the top 37% federal tax bracket. She came in looking for ways to reduce her taxable income and minimize tax-drag in her taxable investment accounts. We built Sally’s financial plan and provided recommendations that increased deferred income over annual contribution limits for a SEP IRA or 401(k) plan while also setting up a Mega Backdoor Roth IRA Contribution Strategy.
Additionally, we helped Sally’s husband set up a company safe-harbor 401(k) plan for his business to further reduce taxable income and provided guidance on using a high deductible healthcare plan with a triple-tax-advantaged HSA to further reduce their annual taxable income in some of their highest earning years, while simultaneously creating another stream of tax-free income for future tax planning strategies.
In total, our recommendations help this family defer $100,000 of income annually, which would otherwise have been taxed at top rates, so that they may receive those dollars in the future at what we projected to be a 12% lower tax rate.
Additionally, we helped Sally’s husband set up a company safe-harbor 401(k) plan for his business to further reduce taxable income and provided guidance on using a high deductible healthcare plan with a triple-tax-advantaged HSA to further reduce their annual taxable income in some of their highest earning years, while simultaneously creating another stream of tax-free income for future tax planning strategies.
In total, our recommendations help this family defer $100,000 of income annually, which would otherwise have been taxed at top rates, so that they may receive those dollars in the future at what we projected to be a 12% lower tax rate.
SAVINGS ALLOCATION STRATEGIES
Grant and Melissa came in looking for the most advantageous way to allocate their excess savings. Grant is a highly compensated architect and Melissa started her own business recently, which took off faster than expected. They were piling up excess low-yielding cash savings while paying ever higher income taxes. They needed a savings allocation and cashflow strategy that would catalyze their retirement savings, take care of their children's education, protect against a pre-mature death, and reduce their lifetime tax burden.
To achieve this, we were able to utilize Grant's employer retirement plans and benefits to take advantage of flexible spending accounts, group term life insurance policies, a Health Savings Account (HSA), and the rare but amazing Mega Backdoor Roth Contribution Strategy via Grant's employer 401(K) after-tax account option. We coordinated these benefits with opportunities that Melissa has being a small business owner, such as using a Solo 401(k) with Profit-Sharing, after-tax, and Defined Benefit components, moving to an S-Corp business structure to reduce payroll taxes, and deploying a Backdoor Roth IRA Contribution Strategy.
To achieve this, we were able to utilize Grant's employer retirement plans and benefits to take advantage of flexible spending accounts, group term life insurance policies, a Health Savings Account (HSA), and the rare but amazing Mega Backdoor Roth Contribution Strategy via Grant's employer 401(K) after-tax account option. We coordinated these benefits with opportunities that Melissa has being a small business owner, such as using a Solo 401(k) with Profit-Sharing, after-tax, and Defined Benefit components, moving to an S-Corp business structure to reduce payroll taxes, and deploying a Backdoor Roth IRA Contribution Strategy.
LIFETIME TAX MINIMIZATION PLANNING
Dr. Sandra came in for a financial plan to, among other things, minimize her tax burden as she transitioned into retirement. She had over $1,000,000 in tax-deferred Traditional IRA assets outside her substantial 401(k) assets, and another $700,000+ in taxable assets which were mostly already stepped up in basis.
After completing her financial plan, we recommended a withdrawal strategy that would optimize Dr. Sandra's low taxable income bracket while remaining under certain tax-advantaged thresholds during the first few years of retirement. At the same time, we structured a tax plan to convert $530,000 from Dr. Sandra’s tax-deferred assets to her tax-free Roth IRA while paying only 12% in federal income taxes on the conversions. Dr. Sandra hadn’t paid that low of a tax rate in decades.
If structured or executed incorrectly, Dr. Sandra could have paid 10% more in federal taxes on $530,000 of her account.
After completing her financial plan, we recommended a withdrawal strategy that would optimize Dr. Sandra's low taxable income bracket while remaining under certain tax-advantaged thresholds during the first few years of retirement. At the same time, we structured a tax plan to convert $530,000 from Dr. Sandra’s tax-deferred assets to her tax-free Roth IRA while paying only 12% in federal income taxes on the conversions. Dr. Sandra hadn’t paid that low of a tax rate in decades.
If structured or executed incorrectly, Dr. Sandra could have paid 10% more in federal taxes on $530,000 of her account.
INSURANCE PLANNING
Robert came in to have a holistic financial plan created to reach his financial goals with a 10-year retirement time horizon. During the planning process we discovered Robert had enough assets to forgo life insurance and the premiums that come with it and recommended a 1035 exchange to move his high-expense, low-return Variable Universal Life insurance policy to a more suitable product with an 84% lower annual premium and more appropriate investment options. By making this change, we were also able to align the investments inside this product to match his aggregate asset allocation while incorporating a tax-smart investment location strategy.
While we do not sell life insurance or any other products that pay commissions -- we were able to provide objective insight into Robert's policy to find a more appropriate solution that projects to help him reach his goals even faster.
While we do not sell life insurance or any other products that pay commissions -- we were able to provide objective insight into Robert's policy to find a more appropriate solution that projects to help him reach his goals even faster.
CAN YOU AFFORD NOT TO KNOW?
Maybe your financial solutions are not represented above. Maybe you've reached a comfortable retirement and need help being good stewards of your wealth while reducing estate and other generational taxes. We won't know what solutions will work best for you until we go through the financial planning process, but having worked with hundreds of families we can safely say we will uncover recommendations that will improve your financial life.
Call us today at 843.946.9868 or use the web form below to schedule a complimentary intro call to discover how Oak Street Advisors can help.
Call us today at 843.946.9868 or use the web form below to schedule a complimentary intro call to discover how Oak Street Advisors can help.
Talk to a CERTIFIED FINANCIAL PLANNER™ Now
With offices conveniently located in Mt. Pleasant, SC and Myrtle Beach, SC we can help you develop a plan to reach your personal & financial goals.