Top 5 Financial Planning And Tax-Saving Strategies For High-Net-Worth Investors In 2025
As we move into 2025, itâs a great time to reassess your financial planning strategy to ensure youâre maximizing your retirement savings, aligning your investments with your goals, and taking full advantage of new opportunities.
đTop 5 Financial Planning and Tax-Saving Strategies for High-Net-Worth Investors in 2025
1ď¸âŁ Increase My Maximum Retirement Plan Deferrals (New Contribution Limits For 2025!)
The IRS has increased the contribution limits for retirement plans once again in 2025, and if youâre not maximizing them yet, nowâs the time to do so!
401(k) and 403(b) Plans: The maximum employee deferral contribution is $23,500, up from $23,000 in 2024. And if youâre 50 or older, you can still contribute an additional $7,500 in catch-up contributionsâbringing the total to $31,000 if youâre over 50.
If you're between the ages of 60-63, you can contribute an ADDITIONAL $11,250 as a catch-up contribution.
This means those 50 to 59 or 64 or older will be able to contribute up to $31,000 in 2025 and those 60 to 63 will be able to contribute up to $34,750 in 2025.
IRAs: The limit for contributions to a traditional or Roth IRA has increased to $7,500 (up from $6,500 in 2024), with the catch-up contribution for those 50 and older still at $1,000.
đĄ Note: These limits apply to employee deferrals, and donât include any employer contributions. So, the employer match is extra savings, which is always a bonus!
đŠđťâđź And if you're a business owner, let's discuss implementing YOUR retirement savings plan.
2ď¸âŁ Review My Personal Goals, Resources, Time Horizon, And Investment Objectives
Investment strategies evolve over time as goals and circumstances change. So, how should you allocate your assets in 2025? Of course every client is different, that is why when you work with us we develop your bespoke wealth and tax management strategy.
But in general terms,
Goals within 3 years:
Keep it liquid. If you have short-term goals, consider placing your money in high-yield savings accounts or short-term CDs to maximize interest while keeping your funds easily accessible. The market is offering some competitive rates, so itâs worth shopping around.
Goals within 3-5 years:
Itâs a great time to consider adding some stock exposure, especially through ETFs. Diversifying with a mix of stocks and fixed income helps balance risk and return for this mid-term horizon.
Goals longer than 5 years:
With a longer time frame, you can take on more risk. Equities (stocks) generally provide higher growth potential over time, so this is where higher percentages of stock exposure may be appropriate. Even if the market dips in the short term, a long-term horizon gives you time to ride out volatility.
And if you are a high-net worth investor whose total net worth is over $10mm we like to discuss additional sophisticated strategies including alternative investments.
3ď¸âŁ Get Familiar With The Newest Updates In Secure Act 2.0
The Secure Act 2.0 brought some game-changing opportunities for retirement planning, and itâs worth reviewing these updates to see how they may benefit you:
Roth SEP IRAs:
Small business owners can now make Roth contributions to their SEP IRAs, which was previously only available for pre-tax contributions. This offers more flexibility for tax planning and can help mitigate future tax burdens.
Employer Roth Matching:
If you contribute to a 401(k), you can now elect for your employerâs match to be made as Roth contributions, meaning theyâll grow tax-free. Youâll pay taxes on them now, but they wonât be subject to vesting.
529 to Roth IRA Conversions:
Have a 529 plan for a childâs education? If the plan has been open for at least 15 years, you can transfer unused funds to a Roth IRA in the childâs nameâ which helps them set up a future retirement nest egg AND reduces the stress of wondering, "What if I fund a 529 plan and my child chooses another route, or gets outside funding, and those assets are not used for education?"
Required Minimum Distributions (RMDs):
If youâre born in 1960 or later, your RMDs now donât start until age 75. This gives you more time to grow your savings and consider Roth conversion strategies before required distributions kick in. This is a strategy we like to discuss with many of our clients - no matter their age and current income and assets.
SEP IRAs for Household Employees:
You can now set up a SEP IRA for household employees like nannies, which is a great opportunity for those with domestic staff to help them save for retirement.
Qualified Charitable Distributions (QCDs):
You can make charitable donations from your IRA starting at age 70½, which is a powerful tax strategy, especially if youâre charitably inclined.
âĄď¸ Thereâs a lot to dig into with Secure Act 2.0âcheck out the full details here if you want to explore all the changes.
4ď¸âŁ Review My Long-Term Care (LTC) Funding Plan
Planning for long-term care (LTC) is a crucial part of any comprehensive financial strategy, and Secure Act 2.0 includes a helpful new provision:
Penalty-Free LTC Distributions:
You can now take penalty-free withdrawals from your retirement account to fund long-term care insurance (up to $2,500 per year or 10% of your vested retirement account balance, whichever is less). This makes it easier to allocate funds for LTC needs without tax penalties.
Even if youâre younger, itâs never too early to consider long-term care options. Many high-net-worth clients are more proactive about this planning, especially after seeing loved ones face the high costs of care. There are various LTC policies to choose from, and if youâre not eligible for one, there may be other alternatives that work better for you.
I discuss long-term care insurance with all of my clients. I know many of us have experienced first-hand or second-hand the results of a long-term health event in loved ones - and we are even more aware of the importance of planning for the costs of the great care that we (and our loved ones) deserve!
5ď¸âŁ Schedule My Annual Financial Review To Address 2025 Goals!
Itâs always a good idea to review your financial strategy with a professional at least once a year. The beginning of the year is an ideal time to ensure youâre on track for your long-term goals.
We can reassess everything from your tax planning and retirement savings to your estate plan and insurance coverage.
Letâs connect soon to ensure your 2025 strategy aligns with your evolving objectives and take full advantage of the tax-saving strategies available this year.
đľď¸ââď¸ 2025 Investment, Tax, And Estate Planning Themes We're Watching
As number nerds, we are always learning about trends in the market, updates in tax planning, new investment opportunities, or wealth management techniques to implement for our clients.
Here are some of the themes we're especially interested in this year:
Artificial Intelligence
Alternative Investments
TCJA (Tax Cut and Jobs Act) - will it sunset or not?
Enhanced Focus on Estate Planning and Asset Protection in a Complex Tax Environment
Adapting to Global Tax Changes and International Investment Opportunities
Maximizing Charitable Giving through Tax-Advantaged Strategies
Implementing Roth IRA Conversions and Tax-Efficient Withdrawals and Retirement Income Planning
And YOUR THEMES - call us so we can add them to our watch-list!
đ Bespoke Wealth And Tax Management Boutique
While many âadvisorsâ offer only investment management, our bespoke comprehensive wealth and tax management services include:
Investing assets in a tax-efficient, diversified manner
Exploring client attitudes values and money stories
Creating a savings and investing plan for financial goals
Saving for retirement, accumulation phase
Creating income in retirement, distribution phase
Ensuring adequate risk management (life, disability, long-term care, liability insurance)
Generational wealth and gifting strategies
Identifying tax reduction opportunities
Communicating important tax, estate, and legal updates
Working closely with your business, legal and accounting advisors on your behalf
đŠđ˝âđŹ đŠđťâđť đž Calling Boston Area Women in STEM!
Throughout the year weâll have programming in addition to meeting other women in STEM professions, including: leadership coaching, career coaching, LinkedIn profile reviews, renewal of headshots, etc.
đ˛RSVP here.