Wealth management: The process of holistically reviewing your financial situation and implementing strategies that help grow your wealth. It seems straightforward in concept, but what does it entail?
Here, we look at various components of a comprehensive wealth management strategy — and related questions that often come up.
Investment Management
How much of your income should you invest? What percentage should you put toward stocks versus bonds? How do you know when to sell? These questions arise whether you’re a seasoned investor or just starting out, and your answers will change and evolve. While some investors choose to tackle these questions independently, many others choose to leverage the services of wealth management firms.
The solution: No matter your income, goals, or stage of life, investment management is all about helping you make the very most of every dollar in your portfolio. An investment manager will take the time to get to know your unique needs and financial standing, including your goals, income needs, risk tolerance, and time horizon. From there, they’ll suggest a personalized investment strategy and then use it to determine asset allocations, execute trades, and monitor portfolio performance.
Retirement Planning
Whether already in retirement or years away, many people worry whether they’ll be able to maintain good financial health without a regular salary. At some point, you’ve likely wondered: How much money do I need to retire? How should I spend my retirement savings? At what age will I be able to retire? What about concerns over the Social Security Trust Fund?
The solution: There’s no one-size-fits-all approach. To create your own personalized retirement plan, ask yourself what you want your life to look like in retirement. Will your lifestyle look more or less the same? Or do you plan to live more luxuriously? What’s your target retirement age? Whatever the case, defining your wishes will help you determine what steps you need to take before retiring.
A major deciding factor in whether you’ll be able to reach your retirement goals is your investment portfolio. As you get older, it’s always a good idea to review the structure of your portfolio and reallocate as needed. In many cases, individuals will engage a financial advisor who can provide expert advice on how to structure their investments best to maximize their savings.
Tax Planning
Whether you’re focused on maximizing your annual income or adding to your retirement nest egg, there’s one question you’ve likely asked: How can I lower my taxes now and in the long term? Taxes can be a significant source of stress and anxiety, but with the right tax strategies, you can reduce your tax burden while staying compliant with all legal requirements.
The solution: Tax planning is the key to lowering your tax liability. It refers to the process of analyzing your entire financial situation from a tax perspective, the goal being to make all elements of your financial plan as tax efficient as possible. Best created with the help of a tax advisor, a tax plan should cover your income, expenditures, investments, retirement plans, and more.
Business Planning
Starting and running a business can be a gratifying experience, but you’re sure to run into several key questions during the process. How can you meet immediate needs and work toward long-term goals? How can you fund your retirement while providing benefits for employees? What will happen to your business when you retire or exit?
The solution: Any business, big or small, can benefit from a financial plan. Consisting of various financial documents, including profit and loss statements, cash flow statements, and balance sheets, a financial plan keeps you on track toward business growth, helping you make informed decisions regarding just about every aspect of your business, from your cashflow and budget to financing and risk mitigation.
Legacy Planning
Legacy planning is your strategy for handing down your assets to loved ones after your passing. While money and death are taboo topics for many, legacy planning is an essential component of wealth management that addresses questions like, How can I make the transfer process easy? How can I minimize taxes to lower the burden on my loved ones?
The solution: The need for a legacy plan may not feel urgent, but the sooner you start planning, the better. You never know what may happen, and without a plan, your assets go through the court system rather than directly to your family. With a financial advisor, you can develop a long-term strategy for minimizing taxes, maximizing inheritances, and simplifying the collection process.
Have More Questions About Your Finances?
Ironwood Wealth Management is here to help you find the answers. We take the time to get to know you to create a comprehensive financial plan that aligns with your needs, priorities, and financial goals. Connect with us today to learn more about our relationship-based approach.
