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“How do I protect what I already have?”

It’s a wealth management question we hear every day.

After all, you’ve worked hard to gain what you have. You’d hate to see it frittered away.

Finalizing your wealth protection strategy is best accomplished when you and your financial advisor build a plan that reflects your risk tolerance and long-term financial goals. At the same time, there are things you can do to put yourself on the best possible path before that meeting. That’s where this article comes in.

Today I want to discuss the strategies you can use, loosely based on your age. We see folks every day that have addressed these issues at all ages; some are proactive twenty-somethings, others are later to the game, and some are addressing them at retirement.


Time is your friend during these decades, so don’t waste it. Good habits created earlier in life are easier to adhere to over the long haul.

Protect your wealth by focusing on budgeting now and saving for retirement. This is a great time to get in the habit of maximizing Roth contributions via an IRA or your employer’s 401(k) plan, if available. You’ll thank yourself later.

If your income level prevents you from a traditional Roth contribution, contribute to a non-deductible IRA instead and make sure your tax preparer is tracking these contributions. Try and get used to maxing out your eligible retirement savings every year. Experience says it will be much harder to make lifestyle adjustments in your fifties and sixties, if you are underfunded for retirement.

If you have children or other dependents, get a will and guardianship document in place and strongly consider getting financial and healthcare powers of attorney as well.

Get ahead of the curve if you have children by opening a 529 immediately to fund their future education expenses. If you can, you should superfund or “front load” it—a tax provision allows you to contribute up to five times the annual gift exemption (currently $15,000 per person) all at once.

The single biggest factor in retirement success is developing a budget and savings plan now to support your long-term financial goals. Many people make the mistake of falling into lifestyle creep in these early years—meaning they increase their discretionary spending as their income increases. Instead of spending more as you make more, save more as you make more to take advantage of the compounding power of time.

To repeat: developing and keeping a budget (and saving as planned) is one of the most important factors in being prepared for retirement.


Now is a good time to become more strategic with your investing and develop a formal investment policy that prevents you from making emotional decisions around your portfolio. Your financial advisor can help you through the important decisions here, but start by limiting individual stocks to no more than 5 percent of your portfolio. The same concept is even more recommended for speculative investments (such as investing in your college friends’ kid’s startup!).

Keep riskier ventures to no more than 5 percent of your portfolio and be sure you can afford to lose ALL of this money if the speculative investment or individual stock fails.

Everybody thinks they’ve identified the next unicorn. But don’t bet your retirement on it. Learn what your risk tolerance is and build a portfolio that aligns with it and your long term needs.

And while you’re finalizing your investment plans, try to maximize your portfolio’s tax efficiency by ensuring the right types of investments are in the right accounts. Tax inefficient assets like bonds and bond funds should be in tax deferred accounts. High growth, tax inefficient assets are perfect for your Roths, etc. Your financial or tax advisor can help you with this task.

Shore up your risk management by reviewing insurance with your broker. Address the worst-case-scenarios by getting an umbrella policy to cover your net worth in the event of a major claim or lawsuit against you. Inventory high-value items in your home and make your insurer aware of them. Review your long term disability policy carefully.

Many folks can’t imagine they will not be able to work until the day they retire. Unfortunately, the reality is that some will be disabled—often during their highest income earning years. Without coverage, your retirement will be negatively impacted.

Finally, consider long-term care options for the services that Medicare won’t cover. If premiums are too high, plan for the alternative (which is paying out of pocket).


You may think the work is done once as you near retirement, but the truth is, there’s still plenty to do. For starters, weigh your options on the timing of Social Security, as starting too early may not be in your best interests. Consider your family longevity, personal health and other income sources.

If you are charitably-minded, consider making charitable gifts directly from your IRA to satisfy your required minimum distributions and also reduce your total income, which has other tax-related benefits (such as reducing potential Medicare income-related surcharges).

Finally, if you’ve been delaying it, this is the time you must think about your legacy and the future of your loved ones. Develop an estate plan with a professional to not only protect your wealth but the transfer of assets to your survivors or charities of choice.