7 Retirement Dos and Don’ts for High-Net-Worth Individuals

We at Heritage Capital assist high-net-worth individuals in navigating the increasingly complex issues of retirement. Whether crafting a multigenerational wealth strategy or aligning investments with retirement goals, we tailor our services to fit your special needs. Our goal is to help you pursue financial independence while preserving and growing your wealth.

Our team, led by Paul Schatz, holder of the Accredited Investment Fiduciary (AIF®) Designation, is dedicated to providing you with the best strategies for retirement planning. Based in Woodbridge, Connecticut, we understand you want to make sure your retirement lives up to your hopes.

7 Dos for Retirement

To help you navigate the complexities of retirement planning, here are seven essential dos that can ensure a comfortable and secure retirement.

1. Begin Early & Plan Constantly

The earlier you start retirement planning, the more prepared you are to address the complicated issues associated with significant wealth. Ongoing planning allows you to adjust to life’s changes, take advantage of unexpected opportunities, and stay on target toward your long-term aspirations.

2. Consider the Tax Consequences

The right tax-advantaged accounts can make all the difference. From maximized IRA contributions and Roth conversions to state-specific tax issues, we show you ways to minimize your tax burden while protecting your assets. We understand that high-net-worth individuals must wrestle with a special set of tax challenges.

3. Consider the Inflationary Factor

Since inflation erodes purchasing power over time, it is a key part of your retirement strategy. Incorporating inflation-protected securities or other hedging strategies helps maintain the real value of a portfolio and protects purchasing power over time.

4. Create a Diversified Investment Portfolio

Diversification is one key to managing risk, especially when managing a large portfolio. An optimal mix of asset classes, including domestic and international equities, fixed income, and alternative investments like real estate, helps protect retirement assets against market volatility.

5. Adopt Active Portfolio Management

While there is certainly a place for passive strategies, active portfolio management can unleash opportunities for growth and protection. Heritage Capital continues to be one of the leading firms in identifying key trends, minimizing risks from economic declines, and individualizing strategies for maximum benefit.

6. Plan for Healthcare Costs

Healthcare expenses, which are key retirement costs, require you to prepare for long-term care and other medical needs with the right insurance and savings plans so that they don’t derail your financial security in your golden years.

7. Consider Legacy Planning

Legacy planning is much more than estate planning; it’s about making a difference, whether by structuring your estate to minimize taxes, incorporating charitable giving strategies, or establishing trusts to protect your heirs. We’ll help you ensure that your wealth aligns with your values.

7 Don’ts for Retirement

While knowing what to do is crucial, it’s equally important to be aware of common pitfalls. Here are seven don’ts that can torpedo your retirement plans.

1. Relying on Social Security Alone

Social Security was never designed to replace a high-net-worth individual’s income needs. While it may be an effective supplement, your retirement strategy needs to focus on the creation of sustainable income streams. Remember, Social Security only satisfies a small part of your required income.

2. Inflation Ignored

Overlooking inflation can be expensive. Even modest rates of inflation may greatly affect how much retirement savings you’ll have over time. Adjusting for inflation is essential to avoid unpleasant surprises.

3. Lack of Diversification

Lack of diversification exposes you to many fronts. Never put all your eggs in one basket through overexposure to pure equities or sector-type investments. Diversification strikes a balance between growth and stability.

4. Taking Excessive Risks

While growth is imperative, too much risk could compromise your financial security in retirement, as you have less time to recover. Indeed, the right balance between risk and reward underpins any successful retirement plan.

5. Ignoring the Costs of Healthcare

Not having a strategy for healthcare expenses can deplete even the most robust retirement accounts. Long-term care alone can cost tens of thousands of dollars per year. By planning ahead in this aspect of retirement, you’ll be ready when unexpected needs arise.

6. Failing to Plan Your Legacy

Legacy planning isn’t just for the ultra-wealthy. High-net-worth individuals should focus on structuring their estates to minimize taxes and protect their heirs.

7. Not Working With a Fiduciary Advisor

If your advisor isn’t a fiduciary, you lack the legal guarantee that they will work in your best interests. Use a fiduciary advisor like a Certified AIF® Designee for peace of mind over the long haul, too. At Heritage Capital, we are committed to providing advice you can trust that will help you avoid costly mistakes.

Get On the Right Track!

Retirement planning for high-net-worth individuals requires a balance among growth, security, and legacy. The above seven dos and don’ts will help guide your retirement with confidence. At Heritage Capital, we are here to provide personalized guidance. Reach out today for a consultation. Let’s craft a retirement plan as unique as your financial goals.