Wealth Care and Tax Planning: The Perfect Combination

With tax filing season now in full swing, the team at Strothman+Co felt it important to remind our clients and the wider community of the importance of a sophisticated tax strategy in building wealth. 

As the saying goes, it isn’t about how much you make, it’s about how much you keep. 

This insight was one of the key reasons we began Strothman Wealth Care. By adding a first-class wealth management team to our existing accounting, advisory, and tax capabilities, the team at Strothman is able to service our clients’ every key financial need. Whether it’s navigating a complex business tax issue or preparing for retirement, the team at Strothman is committed to creating holistic, innovative solutions that help our clients build wealth. 

By working with both Strothman+Co’s tax practice group and Strothman Wealth Care, our clients can create transformational wealth-building strategies that allow them to build a lasting legacy for generations to come. 

If you currently work with Strothman+Co, and are curious about learning more about the benefits of working with Strothman Wealth Care, we encourage you to read on. 

As you work to prepare your 2022 tax filings, there are several questions that you should be asking yourself to ensure your long-term financial plan is functioning like a well-oiled machine. By asking yourself these questions on an annual basis, you’ll be well-placed to optimize your retirement strategy, make wise investment decisions, and build wealth in a manner that’s consistent with your long-term goals. 

Are The Taxes I Pay on My Investment Income Too High?

Investing in a tax-efficient manner is key to producing higher overall returns on any investment: particularly long-term investments such as retirement investments. One key component of that is being alert to the current market conditions and the opportunities those present. 

Towards the end of 2022, a year where the Nasdaq fell 33.1%, the S&P 500 fell 19.4% and the Dow fell 8.8%, investors were presented with the opportunity to harvest tax losses from their portfolio. This method, where investors sell assets that have fallen in value to lock in capital losses, offers individuals an opportunity to minimize their taxable income. 

This is a simple example: the reality is that there are a wide variety of tax-efficient investment strategies that can be implemented to minimize the taxes you pay on your investment income. If you’re interested in learning more about them, we encourage you to contact Strothman Wealth Care

When Can I Retire? Will I Have Enough Money? 

For those approaching retirement, it’s likely that these two questions are top of mind. Nobody wants to keep working longer than they need to, but equally, nobody wants to run out of money in retirement either. 

Answering these questions can feel difficult: how can you look into the future? It might seem challenging, but at Strothman Wealth Care, we have sophisticated software that can make projections about when an individual will have enough money to sustain a comfortable retirement. 

If you haven’t revisited your retirement strategy in a few years, it’s absolutely worth getting an assessment to understand when you’re on track to retire, and how much money you can expect to have each year. 

Is The Return On Investment On My Portfolio Reasonable In Relation To The Amount Of Risk I’m Taking? 

Pretty much every investment decision involves some level of trade-off between risk and return. As a general rule, lower-risk investments deliver lower returns, while high-risk investments might deliver higher returns, but equally might not deliver any returns at all. 

Defining the risk inherent in your strategy is a challenge without the right tools and guidance. At Strothman Wealth Care, our team uses a tool called Riskalyze. This software helps clients compare the investment risk they state they’re willing to take to the level of risk that’s actually inherent in their retirement portfolio (also known as the “beta”). 

In reviewing this data, clients might learn one of two things:

  • Their portfolio is invested in riskier assets than they’re comfortable with, and/or,
  • Their portfolio is failing to generate the returns it should be based on its risk profile

If you’re interested in understanding the level of risk in your portfolio, as well as learning about how that correlates to your rate of return, the Strothman Wealth Care team is available to provide guidance. 

Is My Investment Strategy Appropriate For My Stage In Life? 

The level of risk you take in your retirement strategy depends entirely on your individual goals and life stage. 

The closer an individual is to retirement, the less risky their strategy tends to be. This focus on preserving capital at a conservative rate of return aims to ensure individuals avoid situations where their retirement savings decline significantly in the years immediately preceding their target retirement date. 

On the other hand, younger individuals may adopt higher-risk strategies since they have decades to replenish any potential losses. 

Of course, the decision isn’t as black-and-white as this. Your life stage is just one consideration in determining your wider investment strategy; many others exist. The Strothman Wealth Care team is available to discuss whether your investment strategy is appropriate given your targeted time horizon and other factors. 

Is Our Business’s 401(k) Plan Structured Appropriately? Are The Fees We’re Paying Reasonable? 

Strothman Wealth Care isn’t solely equipped to serve the needs of private clients: the team is also available to help Strothman+Co’s business clients establish whether their existing 401(k) plans are structured in an optimal way. 

With the addition of our newest team members, Shawn Edelen, Patrick Gaughan, and Michael Joksimovic, the Strothman Wealth Care team is well-equipped to help employers review and optimize their employee benefit plans. To learn whether you qualify for a complimentary review of your plan, get in touch today. 

Strothman Wealth Care & Tax Planning

Strothman+Co is equipped to serve the full spectrum of our client’s financial needs, from providing advisory services that help businesses navigate complex challenges to helping craft tax-efficient retirement planning strategies. 

We’re firm believers that individuals have the best prospects of success when they adopt a holistic approach to every element of their financial lives. With that in mind, we encourage you to consider getting around a table with your Strothman+Co tax advisor and the Strothman Wealth Care team: you might be surprised at wealth-building the opportunities you discover. 

Contact an advisor today to learn more

Author: Bill Meyer

This article was written by Bill Meyer, Managing Partner at Strothman+Co. Bill serves clients in a broad range of industries as they launch, grow, maximize, invest, and sell their businesses. On a regular basis, he can be found assisting with matters such as financial reporting; forecasts and projections; cash management; financing; and business improvement. He provides services in the areas of accounting, assurance, tax planning, valuations, and investment advice. 
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