Mistake # 1 – Negligent Investment Management
Wealthy individuals may have a lot of money, but they often lack control over where it is invested – and this can cost them in the long-term. A well-diversified portfolio is optimized to achieve the best possible return with the least amount of risk to weather the storms of both up and down markets.
Do you know the expected return of your assets?
Are you taking too little or too much risk?
Hiring a financial planner to manage your assets based on your goals and objectives enables you to create a plan designed to work towards your long-term goals.
Mistake # 2 – Neglecting tax diversification
Tax now, tax later or tax never? Which one will help you reach your retirement goals? A lot of retirees are surprised when they turn 70½ and start taking their withdrawals, only to discover that their tax bill gets a whole lot higher. That’s because the money they take out of their retirement accounts for living expenses is treated as federal taxable income, and they are often taxed at their highest tax bracket. IRAs and 401(k)s might enable you to save on taxes during the contribution phase, but you end up paying a hefty sum in your retirement years when you withdraw.
A more tax-efficient solution is investing in vehicles like Roth IRAs, Roth 401(k)s, and Insurance products that allow you to enjoy a valuable stream of tax-free income when you’re retired. Please click here to book a financial planning meeting to create a tax-diversified portfolio that positions you best for retirement.