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October is nearly through, and we’re just getting to the time of year when I start to appreciate the extended golfing season here in Florida. For all my years in the Boston area, I can’t say I miss the cold.
In between rounds of golf, Joan and I have our year-end financial planning to do. Yes, financial planners need financial planning and the fully integrated team we talk about so frequently. In the spirit of eating home cooking, here are the top questions I look at with our Napier team for my own plan as each year closes.
Current and projected income: No silos. I own a business, have sold a business, and have other income streams. It’s a lot to coordinate. I need the complete picture, projected through year-end.
Current tax bracket (and future years): Smart tax planning is always looking ahead. We want to know where potential years with low and high tax brackets might occur, especially if you own a business or have private investments. There are steps we can take (and should) to proactively position ourselves for the next few years of tax brackets, high or low.
Vet charitable giving: This one’s relatively simple. Who are we giving to? How much are we giving? Do we want to continue giving to them? Are we doing it in the most tax-efficient way and within the limits allowable by the tax code?
Review estate alignment: We aren’t redrafting documents every year, but we are reviewing the most updated balance sheet, family relationships, and other questions that determine who gets what when the day comes.
Gains and losses: This comes from my team. I’m less in the weeds on these decisions these days.
Double-check distributions: This is also an area I lean on our team. No unforced errors on things like RMDs, inherited IRAs, etc.
Q1 liquidity: Do we have enough cash set aside for this year’s Q4 and next year’s Q1 taxes and obligations so nothing is reactive?
For the business, review ownership structure: Are compensation, distributions, and reinvestment decisions aligned with both the company’s growth and my personal tax picture?
Annual valuation: This doesn’t necessarily happen in Q4, but it comes up in year-end planning. We get a professional valuation on Napier Financial every year. Annual valuations are crucial for estate planning, succession planning, and insurance decisions. It gets messy when valuations are neglected and fall out of date.
Fully Integrated Planning
I enjoy the work of year-end planning. It’s a feedback loop regarding the decisions we’ve made over the last year. It’s also a necessary part of the work for keeping our decisions grounded in strategic timing and information.
I have to say–I’m immensely grateful for our team at Napier Financial. As chairman, I’m removed from the day-to-day planning activities with a lot of complexity on the books. Having our team deliver my fully integrated planning experience makes golf a lot more enjoyable.
