You might be surprised how often wealthy families experience anxiety when they exit their businesses or careers. It centers around a shift away from income to living off of assets. We have clients who have been earning an income since they were 14 working a paper route. Looking forward to the next paycheck is all they can remember.
When all of a sudden those income streams dry up, that moment freaks them out because they know next year is officially going to be worse on their tax return than it was the year prior. That one shift is typically not dealt with because advisors tend to focus on the answer, “You have enough.” That answer misses the felt experience, “This is what you can expect your income to look like now.”
It’s a mindset shift. You have a lump sum, but how to leverage it is a new game. What can you spend? How do you properly invest? How do I adjust my tax strategy?
We find that, especially successful people, most of them just need a clear plan. Generally, we divide up every phase of that plan in one-year increments. These increments connect to the bigger picture of the strategy, but they allow us to be really specific. What do you have? What income will you pull, and from what assets?
These one-year increments also help us be most effective in the integrated aspects of your plan, such as leveling your tax strategy, pacing your assets, and anticipating estate planning questions.
Most importantly, these plans proactively answer your questions and give you far more confidence to enjoy life post-income.
