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Financial Planning > Tax Planning

Build a stronger financial future

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“You can’t overestimate the need to plan and prepare.”
– Chris Corrigan

Though most everyone has wrapped up the 2008 tax season by now, it is important to continue meeting regularly with our clients about how tax policy in Washington affects them at home. Following are several valuable options we can enlighten our clients about to help them build and maintain a stronger financial future.

As trusted advisors, we must stress to our clients the importance of maximizing contributions to their retirement plans, including any employee 401(k), Traditional or Roth IRA or non-deductible account. Maximizing contributions is a critical part of any retirement plan. As a general rule, encourage clients to start contributions early and to put in as much as possible to increase the value of tax-deferred growth.

Plan long term
Long term care insurance is another significant element to any financial plan. Purchasing long term care insurance ensures individuals receive the care they need–whether at home or in a nursing home — without unraveling the financial portfolio of a spouse or family member. This is a critical factor during a time when withdrawing investments or savings to pay for LTC in a deteriorating market compounds the financial burden, even creating financial devastation for both spouses. It is also important to note that long term care insurance can potentially save your clients money on income taxes, as LTC insurance premiums on tax-qualified policies are considered medical expenses under current IRS guidelines.

Another advantage for your clients is that premiums on life insurance are paid with after-tax dollars and that the benefits to beneficiaries are free of income and capital gains taxes and properly structured, estate taxes. Many senior clients may be pleasantly surprised to learn that an older, whole life insurance policy has acquired a significant amount of cash value over time.

The guaranteed approach

Stock market performance over the last year has reinforced the idea that guaranteed annuities were built for turbulent times such as those we are living through. Annuities grow tax-deferred and provide favorable tax treatment on distributions and guaranteed income for life.

I encourage you to utilize these valuable financial alternatives with your clients. Doing so will strengthen their financial health when they need it most.


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