Do you consider yourself awealthy individual?Most people tend not to categorize themselves or see themselvesas anything more than a spouse, parent,sibling,neighbor, boss, or business owner.However, society does classifypeople.Wealthy peopletypically have at least $1million in cash or assets thatcan be converted to cash easily, which could make planning for retirement more complex.iOrganizing your financial life can seem daunting at first, so here aresixideas to help you get started.
1. Goal setting and money management
Peopleof significantmeans are often interestedinwealth preservation andgrowingtheirsavings and investments. They are also noticeably concerned with the social impact their money will have on the world. According to the Oxford Press, wealth managers have shiftedtheir focus from specificinvestment vehicles and strategies to a more holistic investment approach and goal setting.With goals in place, cashflow projections withinflation adjustments will be easier to design.
Historically, inflation averages around3%-3.5% annually; however, recently, this average hasdeviated.iiAfinancial professional can help you adjust your long-term strategy to include a rise in future inflationand assist with planninghow to save enough money to stretch 30+ years without getting sidetracked byexpensessuchas college tuitionsor weddings.According to the Center for Retirement Research at Boston College, half of allAmericanadultsclaimhaving enough money to retire is theirtopfinancialgoal. The reality is that creating a comprehensive plan can bechallengingand careful planning is critical.
2. Max out your retirement accounts
A401(k) can be a powerful tool. If you have access toa plan through your employment, it may bebeneficial to max out your 401(k) each year and take advantage of any matchoffered by your employer. The contributions are tax-deductible in the year thatthey are made. Any moneyleft over can be put into anindividual retirement account (IRA), health savings account (HSA), annuity, or another taxable account.
Some retirement accountshave requiredminimum distributions (RMDs) which, by law, you must withdrawonce youattainage73. In some cases, you may be able to delay RMDs until after you retire if you are still working at73.iiiOther complexities may arise if you inherit a retirement account, but consulting a financial professional can help you determine how to proceed depending on your relationship with the account holder, the type of account, and the decedent’s date of death.
The following accountsgenerally requiredminimum distributions after a certain age:
Traditional IRAs
SIMPLE IRAs
Inherited IRAs (typically, however, there are some exceptions)
Simplified Employee Pension IRAs (SEPs)
Qualified stock bonus plans
Qualified pension plans
Qualified profit-sharing plans, which include 401(k) plans
Section 403(b) and Section 457(b) plans
3. Stay up to date with tax law changes
Estate and gifttaxchanges–As of January 1, 2026, the federal gift/estate tax exemption increased to $15,000,000, while the federal annual exclusion amountincreased to $19,000 per personperparent.ivSo, in effect, any individual may receive up to $38,000 per couple per year.Any amountover the $38,000 threshold can be put toward the lifetime exemption amount.Utilizing this benefit nowmay bea good ideaas come January1, 2026, unlessCongress decides otherwise, these high exemptions are scheduled to sunset and return tothepreviousTax Cuts and Jobs Actamounts.
Modifications to charitable deductions –Currently, you arepermittedto deduct 60%of adjusted gross income (AGI) for cash contributions held for over a year. For non-cash assets(property and long-term appreciated stocks),you generally deduct,at fair market value, up to 30%of your AGIfor charitable contributions to an IRS-qualified 501 (c)(3) public charityifyou select to itemize, which means forgoing the standard deduction. To account for inflation, the standard deduction is higher in 2026, up to $16,100 for individuals,$24,150 for head of household, and $32,200 for married couples who file joint returns. When you itemize, youshouldexpectthe sum of youritemized deductions tobe greater than the standarddeduction.v
Home sale exclusion for primary residence (Statue 26U.S. Code 121)– Exclusion of gain onthesale of principal residence allows an exclusion of $250,000 (for individuals) and a $500,000 (for married couples) on home salegains.viPeople who own a home as a primary residence for at least twoof the five years immediately beforeselling their home can qualify for capital gains tax exclusion. There are many moving parts and rulesto this exclusion, and gettinghelp from a financial professional is highly encouraged.
The impact from Medicare surtax–For2026,surcharges are applied based on your 2024 tax return.
Other expenses that qualify for deductions along with charitable donations include:
State and local tax
Mortgage interest
Medical and dental expenses
4. Confirm and communicate your charitable goals
An estimated72%ofwealthy individualsgiveat least $10,000 to charityannually.viiA financial professional will want to know the details about yourphilanthropyeffortsto help you get the most out of your giving strategy.
How are you involved ina charity? Are you just a donor,or do you sit on the board?
Why do you support the charities that you do?
What types of assets do you typically donate?
Have you always donated, or do you plan to wait and donate after you die?
5. Create a withdrawal strategy
The question many retirees have is, “How do we deal with withdrawing our money when the time comes?”When it comes to your retirement, having a well-defined plan can help mitigate stress and frustration and potentially preserve wealth.
Some of the concepts you may want to exploreinclude:
Focusing on the lower tax brackets first– Typically, the income of a high net-worth individualwill dipafter you stop working.Depending on your age and other requirements, you can consider withdrawing from your IRA and paying the taxes at the lowest marginal tax rate, especially in that window before social security benefits kick in.viiiAnd if you can, delay taking social security benefits until the maximum age,maximizing the amount you will receive.
Review where your assets arelocated– Where are your stocksand bonds, for example,located?Are they in a tax shield IRA account whereyou may benefitbecause the bonds produce income taxedatordinaryincome rates?
IRA Conversion (Traditional IRA -> Roth IRA) and Recharacterization (Roth IRA -> Traditional IRA) –A potentially helpful strategy,albeitcomplicated, involves converting assets from an IRA to a Roth IRA in what is called a Rothconversion.ixYoupay taxes onany assetsconverted, and money is withdrawn later tax-free. This strategy could be beneficial if you suspectyou may be in a higher tax bracket in the future. A recharacterization isconvertingassets from aRoth IRAto a traditionalIRA.xSo, for example, you convert assets to a Roth account,and the market happens to drop after your conversion. You can recharacterize those assetsbackto a traditional IRA,removing the tax liability resultingfrom the conversion.
Don’tget bullied by the tax rates –Youcan’tpredict the future of the tax rates and where you will be within them down the road. If taxes happentogo up, which they tendto do, then yourtax-deferred money suddenly has less valuethan before since it getstaxed at a greater rate upon coming out ofthe account. Because this is possible, you should consulta financial professional and let them help you create a strategy that aligns with your financial goals.
6. Seek professional financial guidance
Managing your finances in an ever-changing world can be overwhelming, especially if you are someone with significant wealth. It wouldhelp if you had someone toguide youalongyour financial journey.Working witha financial professional can help you mitigate risk, consider options you might not have considered before, and stay aligned with your financial goals.Schedule a meeting with a financial professional and get the help you need to start your retirement planning journey today.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by LPL Marketing Solutions.
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Sources:
iHigh-Net-Worth Individual (HNWI): Criteria and Example
iiThe Great Inflation | Federal Reserve History
iiiMaking sense of RMDs - Fidelity
vWhat the One Big Beautiful Bill Act means for charitable giving | DAFgiving360
viTopic no. 701, Sale of your home | Internal Revenue Service
viiDifferentiating with charitable planning
viiiRetirement plans FAQs regarding IRAs distributions (withdrawals) | Internal Revenue Service
ixConvert to a Roth IRA | Roth Conversion Rules & Deadlines | Fidelity