How to Make a Comprehensive Financial Plan | Abacus Wealth Partners


Prioritizing Safety by Mitigating Risk

You never know when you will face a financial setback, and protecting your wealth with the right insurance is pragmatic. It’s not a one-size-fits-all solution: the best options for you will depend on your budget, risks, assets, and specific needs.

Surprisingly, Statista found nearly 1 in 10 Americans don’t even have health insurance, not to mention other necessary coverage like life, homeowner’s, and auto insurance.

When speaking with your Abacus advisor about insurance needs, they will never try to upsell you on insurance packages that give them benefits. Why? Because 100% of our advisors are fiduciaries that work on a fee-only basis. This means they never get any kickbacks or backdoor payments for recommending specific insurance coverage (or investment opportunity) to you. 

In short, your best interests drive everything we do. 

Beyond finding personalized insurance plans that save you money while mitigating as much risk as possible, we understand your insurance needs will likely change over time. For example, you will probably want life insurance during your career while raising a family, but you may no longer need it when you retire and your adult children aren’t financially dependent on you. 

Ensure You Don’t Overpay Your Taxes

Proactive tax planning is one of the most important ways your Abacus financial advisor will help you make the most of your money.

Tax planning is a process that looks forward to finding opportunities that save on taxes in the long run. It can include strategies like tax-loss harvesting (selling assets at a loss to offset gains), Roth conversions (converting money from a traditional account into a Roth to prioritize after-tax distributions), strategically realizing gains (like when to sell a business), and more. 

A critical element of tax planning is investing in accounts with different tax treatments, also known as tax buckets. Your advisor will help you leverage all three ‘tax buckets’ so you can maximize your money:

  • Pre-tax. This includes a traditional IRA and 401(k). These accounts let you make pre-tax contributions which lower your taxable income for the year. Reducing your taxable income can mitigate your total tax bill come April.
  • After-tax. This includes a Roth 401(k) and Roth IRA. When contributing to a Roth IRA, you put in after-tax dollars, the money grows tax-free, and qualified distributions remain tax-free. In 2022, the maximum IRA contribution is $6,000. You can also contribute to a Roth 401(k) if your plan allows. High earners may benefit because there are no income thresholds for contributing and the annual contribution limits are higher than a Roth IRA. 

Abacus can work with your Certified Public Accountant (CPA) to ensure you’re paying as little in taxes as possible. If you’ve never worked with a CPA before, we can connect you with a trusted professional. They will carefully examine your taxes to ensure you don’t overpay while enjoying as many deductions as possible.

Tax season is never fun, but at least with proper help, you know you are supported and your money is protected.

Your Estate is a Legacy 

Being financially responsible isn’t just something that affects you – it can change the trajectory of your loved ones’ lives, too.

Your Abacus financial advisor will help you intentionally explore how best to pass down wealth so that when the time comes, those you leave behind won’t have to deal with the stress of disorganized finances on top of their grief. 

When preparing your legacy, consider what you may need:

  • Trust: A trust ensures your assets are distributed according to your wishes. A trust is a fiduciary relationship that helps you control the asset transfer process. You can place several assets within a trust or name a trust as a beneficiary of assets, like your home, cars, and investment accounts.
  • Will: A will is a document that spells out your wishes, who will care for your children, where you want your personal property to go, and more.
  • Beneficiaries: Who will be eligible to receive distributions from your trust, will, or life insurance policy? It is best to review this annually to ensure it is up-to-date and your wishes are clear.
  • Co-signer: On your checking and savings account(s), it may also be in your best interest to consider adding a co-signer, trusted friend, or relative so they can help pay bills while your trust is being distributed.
  • Titling: Make sure all your assets are titled in the trust’s name so the transfer process can be as smooth as possible for your loved ones.
  • Power of Attorney: This document allows someone close to you to make personal, medical, or financial decisions on your behalf if you become incapacitated or otherwise can’t make those decisions for yourself. 

Remember, a comprehensive estate plan is a gift for your loved ones. By making all of these plans now, your family won’t have to worry about the financial stresses after you’re gone. 

Above all, you have agency to choose what happens to your assets – not the courts or your family. Your Abacus advisor can help you plan the necessary steps to ensure a smooth transition, creating a lasting legacy for your loved ones.

Making an Impact on Your Community

Beyond providing for your immediate family, how can you make a difference in the world?

Despite economic hardship brought on by the COVID-19 pandemic and inflation, charitable giving rose significantly in recent years. Giving USA reports that Americans gave nearly $500 billion to charities in 2021. 

Giving back is a fantastic feeling, and it’s fulfilling to step back and decide what kind of an impact you want to make on the social issues that speak to you. 

It doesn’t only have to involve money, either – you can donate your time or your talents. Maybe you want to help feed the homeless at a local food kitchen, spend quality time with older adults at a retirement home, or even volunteer as a tutor for struggling students. 

However you want to make an impact, make sure you are doing something authentic to your values and that fills your charitable cup. 

Why Abacus?

At Abacus, we focus on creating a holistic, values-focused financial plan specific to each client’s goals. 

We not only help you to maximize your money through tax-saving strategies, risk management, investments, estate planning, and more, we also help you prioritize what matters to you most.

Our mission is to help you align your money with your values and live an empowered financial life free of unnecessary worries and costly mistakes. 

To learn how we can help you have a sense of ease and freedom, schedule a free introductory call today.

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