Are You Taking Full Advantage of Your Employer’s 401(k) Match?

Saving for retirement is one of the most important financial steps you can take, and an employer-sponsored 401(k) plan with a matching contribution is like finding free money for your future. If you’re not maximizing this benefit, you’re missing out on a golden opportunity to supercharge your retirement savings. Here’s why taking full advantage of your employer’s 401(k) match is a no-brainer—and how a financial advisor can help you make the most of it.

What’s an Employer 401(k) Match?

Many employers offer a 401(k) match, meaning they’ll add money to your retirement account based on what you contribute. For example, if you earn $60,000 and your employer matches 100% up to 3%, contributing $1,800 a year gets you an extra $1,800 from them—doubling your savings instantly! It’s like a bonus that grows over time.

Why You Should Jump on This

  1. It’s Free Money!
    Your employer’s match is cash handed to you for your retirement. Skipping it is like leaving part of your paycheck on the table.
  2. Your Money Grows Faster
    Money in a 401(k) grows tax-deferred, letting your savings compound over time. That small match today could become a big nest egg by retirement.
  3. An Instant Boost
    Where else can you double your money the moment you invest it? A 401(k) match gives you an unbeatable head start.

Don’t Miss Out on Extra Perks

Some employers sweeten the deal with options like:

  • Pre-Tax or Roth Contributions: Choose pre-tax to save on taxes now or Roth for tax-free withdrawals in retirement. Not sure which is best? An advisor can guide you.
  • Dual Plans: Work for a public sector employer? You might have access to both a 401(k) and a 457(b), letting you save even more. Maximize both with expert help.
  • Mega Backdoor Roth: Some plans let high earners stash extra savings in a tax-free Roth account. It’s a game-changer, but it’s tricky—make sure you seek advice first!

How to Make It Happen

Getting the most from your 401(k) is easier than you think, but it takes a plan:

  • Check your employer’s match details and contribute enough to grab every penny.
  • Review your budget to prioritize this benefit, even if you start small.
  • Choose smart investments within your 401(k) to grow your savings efficiently.
  • Work with a financial advisor to create a personalized strategy that fits your goals.

Why an Advisor Makes the Difference

Navigating retirement plans can feel overwhelming—vesting schedules, investment options, tax rules, and special strategies like the mega backdoor Roth aren’t exactly light reading. A financial advisor can simplify it all, ensuring you’re not leaving money on the table and your retirement plan is built to last. They’ll tailor a strategy to your unique situation, so you can focus on today while securing your tomorrow.

Start Building a Stronger Retirement Today!

If you’re unsure whether you’re maximizing your 401(k) match, we’re here to help! At Toomey Investment Management, we’ll guide you through smart retirement strategies to ensure you make the most of every opportunity.

 

Schedule a consultation today and take full control of your retirement future!

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What is Investment Management & Why is it Important?

Managing investments wisely is essential for building and preserving wealth in today’s dynamic financial landscape. But what is active asset management, and why does it matter? Whether you’re planning for retirement, saving for a major life event, or aiming to grow your wealth, understanding active asset management can empower you to make informed financial decisions.

What is Active Asset Management?

Active asset management involves the hands-on, strategic oversight of financial assets and investments to achieve specific financial goals. Unlike passive strategies that track market indices, active asset management entails proactively selecting, buying, and selling investments such as stocks, bonds, mutual funds, real estate, and other assets. Active managers leverage in-depth market analysis, economic insights, and risk assessments to craft tailored strategies that aim to outperform the market while aligning with clients’ objectives.

At Toomey Investment Management, we view active asset management as a dynamic process that goes beyond simply holding investments. It requires continuous monitoring, tactical decision-making, and personalized portfolio adjustments to capitalize on opportunities and manage risks effectively. By customizing strategies to each client’s financial goals and risk tolerance, we help navigate the complexities of ever-changing markets.

Why is Active Asset Management Important?

Active asset management is critical to achieving financial success. Here’s why:

  1. Pursues Outperformance to Achieve Financial Goals
    Whether saving for retirement, funding a child’s education, or preparing for a major purchase, active asset management strives to deliver superior returns to help meet these objectives. By actively seeking undervalued assets or emerging opportunities, managers aim to outperform market benchmarks, ensuring your money works harder toward your short- and long-term goals.
  2. Proactive Risk Management and Diversification
    Financial markets are inherently volatile, but active asset management mitigates risks through strategic diversification and timely adjustments. Active managers spread investments across various asset classes, industries, and regions while continuously monitoring market conditions to rebalance portfolios, reducing exposure to downturns and protecting wealth from significant losses.
  3. Maximizing Returns Through Opportunity-Seeking Strategies
    Active asset management focuses on identifying high-potential investments and capitalizing on market inefficiencies. By carefully evaluating opportunities, actively managing costs like internal portfolio expense and taxes, and making data-driven decisions, managers aim to optimize growth and deliver stronger returns compared to passive approaches.
  4. Adapting Swiftly to Market Changes
    Economic, political, and global events can cause rapid market shifts. Active asset managers stay ahead by analyzing trends, anticipating changes, and adjusting strategies in real time. This agility ensures portfolios remain aligned with financial goals, even in turbulent or uncertain market environments.

By emphasizing proactive decision-making and personalized strategies, active asset management offers a powerful approach to growing and protecting wealth, helping you navigate the financial markets with confidence.

Partner with Toomey Investment Management

Navigating the investment landscape can be challenging, but you don’t have to do it alone. At Toomey Investment Management, we provide personalized investment strategies designed to meet your financial needs and risk tolerance. Contact us today to learn how we can help you work towards achieving financial success with a well-managed investment portfolio.

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  • toomeyinvest
  • Wealth
  • May 7, 2025

Achieving Your Personal Financial Goals with a Trusted Financial Planner

Setting personal financial goals is an essential step toward building a secure and fulfilling future—but reaching those goals takes more than just good intentions. Whether you’re saving for retirement, planning for a major life milestone, or simply trying to get a better handle on your finances, working with a trusted financial planner can make all the difference.

At Toomey Investment Management, we believe that personalized guidance is key to financial success. Here are a few ways a financial planner can help you work toward achieving your personal financial goals:

  1. Clarify Your Vision
     It all starts with understanding what you truly want. A financial planner helps you define clear, realistic goals—whether it’s buying a home, funding your child’s education, or enjoying a comfortable retirement. With a clear vision in place, you can start building a practical plan.
  2. Create a Strategic Roadmap
     A financial planner doesn’t just look at your savings account—they evaluate your full financial picture. From investment strategies and tax planning to budgeting and insurance, your planner will develop a comprehensive, step-by-step approach to help you reach your short- and long-term objectives.
  3. Stay Accountable and On Track
     Life changes, and so should your financial plan. Regular check-ins with your planner ensure your strategy adapts to new circumstances, helping you stay focused and avoid costly missteps.
  4. Make Informed Decisions with Confidence
     One of the biggest advantages of working with a financial planner is having a knowledgeable partner by your side. With access to expert insights and tailored advice, you can feel confident about the decisions you make.

At Toomey Investment Management, we take the time to get to know each client personally. As a multi-generational, family-run firm, we value relationships and offer continuity you can trust—helping you build wealth with purpose, and peace of mind.

Let us help you turn your financial goals into a reality. Contact Toomey Investment Management to schedule a consultation today.

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Saving for Retirement: Aligning Your Personal Financial Goals with Expert Asset Management

Planning for retirement is one of the most important financial goals you’ll ever set. Yet, many individuals delay saving or don’t have a clear strategy in place. Without a well-structured plan, it’s easy to fall behind and risk financial uncertainty in your later years. That’s where expert asset management and financial planning come into play.

Start with Clear Personal Financial Goals

The first step in saving for retirement is understanding your personal financial goals. Ask yourself:

  • At what age do I want to retire?
  • What kind of lifestyle do I envision in retirement?
  • How much money will I need to cover my expenses, including healthcare and leisure?

A financial planner can help assess your current financial situation and project what you’ll need based on inflation, expected returns, and potential expenses. Setting clear, achievable goals ensures you stay on track.

The Role of Asset Management in Retirement Planning

Once you establish your goals, the next step is effective asset management. A well-balanced investment portfolio tailored to your risk tolerance and time horizon can make a significant difference in your retirement savings.

A financial planner can help diversify your portfolio across various asset classes, including:

  • Stocks for long-term growth
  • Bonds for stability and income
  • Real estate or alternative investments for added diversification

Asset management isn’t just about investing—it’s about making informed decisions that align with your long-term financial security. Regular portfolio reviews help adjust for market changes, life events, and shifting financial priorities.

Why Work with a Financial Planner?

Navigating retirement planning alone can be overwhelming. A financial planner provides valuable insights, helping you:

  • Create a savings and investment strategy tailored to your retirement goals
  • Optimize tax-efficient investment options
  • Adjust your financial plan as your needs evolve
  • Ensure you’re making the most of employer-sponsored retirement plans and IRAs
  • Creating a nuanced estate plan to help protect your assets during, and after life. 

Toomey Investment Management offers personalized financial planning services designed to help you maximize your retirement savings and achieve financial peace of mind. By working with an experienced advisor, you can confidently build toward a secure financial future and enjoy the retirement you’ve always envisioned.

Start Planning Today

It’s never too early—or too late—to start saving for retirement. Contact Toomey Investment Management today to develop a customized financial strategy. 

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  • toomeyinvest
  • Finance
  • October 21, 2024

Ensuring Your Legacy: How to Plan Your Estate for a Secure Future

While few people may find saving for retirement and retirement planning “fun,” what it represents is generally positive: a time when you can cease the daily grind of work, set your own life pace, and enjoy hobbies, friends, and families.

Estate planning, however, is most certainly not an enjoyable activity, as it generally involves addressing a time after one’s death. There are good reasons, however, why estate planning should be an important complement to retirement planning. There is enough cross-over in the two activities that it makes sense to engage in them at the same time.

Having a comprehensive estate plan ensures that your assets are distributed according to your wishes, minimizes taxes to maximize what you pass on to your heirs, and prevents court intervention, providing peace of mind for you and your loved ones. It’s also a critical step in achieving your personal financial goals and securing your legacy.

Because retirement planning and estate planning are intertwined, it’s a good idea to work with a financial planner who specializes in both: this individual can help you arrange your estate in a way that will maximize what you leave to your heirs and minimize the work they will have to do in the event of your death. They can also assist with asset management and guide your investment strategy to ensure your long-term objectives are met.

Some elements to consider when planning your estate include:

Whether you will create trusts. There may be a variety of reasons to create trusts. In the case of dependents, you may wish to set up trusts that will ensure they have enough money to finish school, train for a career, or reach a certain age before they can access an inheritance. For family members who require special help or care, a trust can ensure that the care is funded for the rest of their lives.

Minimizing tax burdens. Improper estate planning – similar to improper retirement planning – can expose you to the risk of paying more taxes than necessary or leaving less to your heirs. A professional advisor can address strategies for both retirement and estate planning to ensure that you are minimizing your overall tax burden and maximizing the value of your wealth management plan.

Protecting personal assets from business losses. As a business owner, you’ll know that retirement or death does not end the possibility of lawsuits against your nest egg or your estate, particularly if you operated a business in a high-risk category such as healthcare or construction. A careful estate plan will protect your assets from lawsuits that might be filed after you’ve retired or after you have passed away, protecting both your retirement funds and your heirs through smart independent portfolio management.

Integrating Retirement Planning and Estate Planning

In your financial planning, you may tap the resources of a financial advisor, a tax professional, and a lawyer. Are these professionals working together to ensure that your retirement planning and your estate planning are complementary? Ideally, retirement professionals, estate planners, accountants, and attorneys should all work together to produce an all-encompassing personal financial strategy.

At Toomey Investment Management, we understand the importance of a cohesive approach to your financial future. By integrating retirement planning and estate planning, we help ensure that all aspects of your financial life are aligned and working together. Let our experienced team guide you through a seamless strategy that meets your unique needs—from saving for retirement to effective asset management. Contact us today!

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  • toomeyinvest
  • Wealth
  • October 21, 2024

Choosing the Right Investment Strategy

When it comes to investing, one size does not fit all. The key to successful investing is choosing the right strategy that aligns with your personal financial goals, risk tolerance, and time horizon. Making informed decisions in these areas can significantly impact your financial future and overall peace of mind.

Aligning with Your Financial Goals

The first step in crafting a sound investment strategy is to define your financial goals. Are you saving for retirement, funding a child’s education, or building wealth for a major purchase? Your goals will determine the types of investments you should consider. For example, long-term goals like retirement might benefit from growth-oriented investments such as stocks, while short-term goals may require more conservative options like bonds or money market accounts.

Understanding Risk Tolerance

Risk tolerance is the degree of variability in investment returns that you are willing to withstand. It’s essential to assess how comfortable you are with potential losses in the short term. If you have a higher risk tolerance, you may be more inclined to invest in equities, which can offer higher returns but also come with higher volatility. Conversely, if you are risk-averse, you might prefer fixed-income securities that provide more stability but lower returns. Understanding your risk tolerance helps in selecting an investment mix that you can stick with, even during market downturns.

Considering Your Time Horizon

Your investment time horizon, or the length of time you plan to hold an investment before taking money out, is a crucial factor in determining your investment strategy. A longer time horizon allows you to ride out market fluctuations, making higher-risk investments more viable. However, if your time horizon is short, you may need to focus on more conservative investments to preserve your capital.

Seek Professional Guidance

Choosing the right investment strategy involves balancing your financial goals, risk tolerance, and time horizon. It can be a complex process that requires careful planning and a deep understanding of the financial markets. This is where professional guidance becomes invaluable. At Toomey Investment Management, we help clients develop tailored investment strategies that align with their unique circumstances. Our experienced advisors work closely with you to understand your goals and craft a plan that fits your needs.

Don’t leave your financial future to chance. Contact Toomey Investment Management today to learn how we can help you create an investment strategy that positions you for success.

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The Three Pillars of Retirement: Pension, Social Security, and Personal Investment Income

We all have plans (or dreams) to retire one day. While dreams are important, the foundation for retirement is just as critical. Will you have enough money to fund your retirement? Establishing clear personal financial goals and working with a knowledgeable financial planner can help turn those dreams into a reality.

Three Types of Retirement Income

For many Americans, there are three elements of a solid retirement planning strategy: pension income, social security income, and personal investment income. In this blog, we’ll provide an overview of these three types of income and how they contribute to saving for retirement.

Pension income. Once a common benefit among U.S. employers, traditional pensions in the United States are on the decline, with more companies switching from providing direct pensions to outsourcing the process to defined contribution plans such as 401Ks.

According to the Bureau of Labor Statistics using data from March 2023, 73 percent of civilian workers had access to retirement benefits. The take-up rate (defined as the percentage of workers with access to an employer-sponsored benefit who choose to participate) for retirement benefits was 77 percent.

Social Security. While social security can provide some income for day-to-day living, living on social security alone is nearly impossible for people in many parts of the country.

“A popular rule of thumb is that you’ll need about 80 percent of your pre-retirement income to maintain your current lifestyle. Unfortunately, Social Security benefits supply only about half of that if you’re an average earner,” according to SmartAsset.com. Individuals still working can check their estimated benefits on the Social Security website, and see estimates of their benefits at early, standard, and late retirement ages.

Personal investment income. Personal investment income is money earned from the buying, owning, and selling of investments. These investments not only provide capital for living expenses during retirement, but they also generate other income streams, including capital gains, dividends, and interest on the investments from products such as corporate or government bonds or CDs. Designing a long-term investment strategy aligned with your goals is a key element of successful asset management.

Not Everyone Qualifies for All Three

Not all Americans are entitled to or have access to all three of these income vehicles, which means it’s even more important to consult with a knowledgeable financial planner who can provide alternatives to ensure plan stability. This substitution begins with a comprehensive needs analysis, enabling investors and advisors to construct a proposal that highlights the strengths, weaknesses, or limitations their plan circumstances may present.

Choose an Experienced Retirement Planning Partner

Toomey Investment Management, Inc. is a Wallingford, Connecticut-based independent registered investment adviser (RIA) advisory firm that offers clients expertise in independent portfolio management, tax planning and preparation, risk management, and estate planning. Their comprehensive services aim to create a durable, effective wealth management strategy customized to client needs.

A prudently designed retirement income plan is crafted to client specifications with a central focus on flexibility and durability. Whether you’re focused on building wealth, saving for retirement, or securing long-term income, our team is here to help.

When we partner with clients, there is a shared interest in the longevity of the plan. We tell our clients on day one: this is a business of variables, and we aren’t doing our jobs if the product we provide isn’t a durable one.

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Understanding Investment Options: Stocks, Bonds, and More

If you’re looking to invest or to expand your existing investments, you’re not alone. According to the Wall Street Journal, the percentage of Americans who own stocks is at an all-time high, with approximately 58 percent of U.S. households owning stocks in 2022, according to a study of consumer finances conducted by the Federal Reserve. This figure is up from 53 percent in 2019 and marks the highest household stock-ownership rate ever recorded in the triennial survey.

Stocks, of course, aren’t the only types of investments open to Americans, and today investors and would-be investors are arming themselves with the knowledge they need to save and invest effectively. To do so, it’s important to understand the differences between common investment products and how each fits into your broader wealth management plan or investment strategy geared toward achieving your personal financial goals.

Stocks

Stocks represent ownership shares in a company, with common stockholders typically enjoying voting rights and a claim on the company’s profits and assets. The value of stocks can fluctuate significantly based on market conditions and company performance, offering the potential for high returns but also posing considerable risks. Companies may issue different classes of stock; common stocks, which allow voting on corporate matters, and preferred stocks, which usually lack voting rights but offer fixed dividends and have priority over common stocks in asset claims during liquidation. Additionally, stocks can be held directly, allowing personal control and voting rights, or indirectly through mutual funds or ETFs, where investors own shares of the fund rather than the underlying stocks. Some stocks are restricted or come as options, often part of employee compensation packages, which may have specific conditions or benefits attached.

Bonds

Bonds are issued by governments or companies and represent a long-term loan from the investor, who receives regular interest payments and the return of the bond’s face value at maturity. Bonds are generally seen as safer than stocks but typically offer lower returns. Treasury Bonds, issued by the federal government, offer tax advantages as their interest income is exempt from state and local taxes. Municipal Bonds, issued by local governments, provide tax-exempt income at the federal level, and sometimes state and local taxes, appealing particularly to those in higher tax brackets. Bonds are often a key component of asset management in balanced portfolios.

Mutual Funds

Mutual funds allow investors to pool their money to purchase a diversified portfolio managed by financial professionals. These funds can invest in stocks, bonds, or other assets and are valued at the end of each trading day. Mutual funds offer diversification and professional management but come with management fees that can impact returns. They are often utilized by those focused on saving for retirement while maintaining exposure to multiple markets.

Exchange-Traded Funds (ETFs)

ETFs are similar to mutual funds but trade on stock exchanges like individual stocks. They offer the benefits of diversification and lower operational costs and can be bought and sold throughout the trading day. ETFs often track specific indices, sectors, or commodities, providing an efficient way to gain exposure to diverse investment areas while aligning with a structured investment strategy.

Certificates of Deposit (CDs)

CDs are timed deposits made with banks that offer fixed interest rates over a specified period. They are FDIC-insured up to certain limits, making them a secure investment, though generally yielding lower returns compared to stocks or bonds. CDs are best for investors looking for guaranteed returns without exposure to market volatility—an ideal supplement for conservative retirement planning.

Real Estate Investment Trusts (REITs)

REITs are companies that own or finance income-producing real estate across a range of property sectors. They offer investors regular income streams, diversification, and the potential for capital appreciation. Most REITs are publicly traded on major securities exchanges, and their tax advantage includes the requirement to distribute at least 90% of taxable income to shareholders as dividends.

Annuities

Annuities are financial products that pay out a fixed stream of payments to an individual, typically used as an income stream for retirees. They are divided into immediate and deferred annuities, depending on the payout timing. One significant tax advantage of annuities is that the money invested grows tax-deferred until withdrawal, which can be strategically planned for a period when the individual is in a lower tax bracket.

What Investment Products Are Right for Your Portfolio?

The ideal investments will depend on how much money you have to invest, how close you are to retirement, how much risk you can tolerate, and what you plan to use the money for. It’s a good idea to consult with a professional financial planner or advisory firm that can provide insights into independent portfolio management and tailored solutions that support your long-term goals.

Toomey Investment Management offers a client-centric approach to investing by focusing on individual personal financial goals and crafting strategies aligned with effective wealth management. Our business model is designed to treat all of our clients equally and fairly. We realized long ago that the financial industry dedicated many resources to capture money from prospective clients but much less on service and accountability for existing clients. At Wallingford, Connecticut-based TIMI, we listen carefully, keep in touch, and return your calls and communications quickly, so you can count on us. Whether you’re building a retirement nest egg, enhancing your asset management strategy, or refining your investment strategy, we’re here to guide you. Call us at 203-949-1710 or visit our website for more information.

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  • toomeyinvest
  • Wealth
  • April 24, 2024

Legacy Planning Tips for Baby Boomers

Data from the U.S. Census Bureau show that there are 76.4 million Americans from the “Baby Boom” generation living today. Baby Boomers – those individuals born between 1946 and 1964 – are currently of an age to retire or prepare to retire (even the youngest ones). In the coming years, the wealth transfer from the Baby Boomers to younger generations is expected to be record-breaking: estimates have found that approximately $72 trillion worth of assets are currently possessed by Baby Boomers, and much of this wealth will ultimately be transferred to heirs. 

At the same time, many Americans from this generation have failed to properly build an estate plan. One study found that only 43 percent of Americans have a will. This is an issue of concern, particularly for Americans with dependents such as a spouse, children, or even elderly parents – who may rely on them for financial support. Estate planning is a critical way property owners and investors can protect their loved ones in the future. With the right guidance, individuals can create a legacy that will maximize the amount of wealth they transfer to heirs by limiting taxes, errors, and unnecessary administrative costs.

Strategies for Preserving and Passing on Wealth

Generally speaking, these strategies involve the creation of wills or living wills. At its core, a will is a comprehensive legal document that outlines an individual’s final wishes and how they want their assets distributed. A will also identify who will manage an estate and care for any minor children or dependents after an individual’s death. Legacy planning may also include the creation of trusts. A benefit of a trust is that it will generally allow heirs to bypass the expensive and time-consuming process of probate and make an individual’s assets immediately accessible upon death. Trusts can also be used to reduce estate taxes, protect heirs from creditors, and ensure that assets that are designated for dependents are distributed according to the legacy holder’s wishes.

Planning for Philanthropy

The Baby Boomers have traditionally been generous when it comes to charitable causes, and many may wish to include these favored causes in their estate planning. Charitable giving can result in disputes among family heirs, however, so it’s critical that these charitable legacies be crafted properly so they are not legally open to challenges.

Legal and Tax Considerations for Legacy Planning

Few people today are hoping to pay as much as possible in taxes when their estates are transferred. That said, an improperly planned estate can be costly to heirs when tax considerations are not carefully weighed. Estate taxes are those that are levied on the value of an individual’s assets at the time of their death. This tax is calculated based on the total value of an individual’s estate, including personal property, cash, investments, and real estate. Tax considerations are highly complex and may be affected by state, federal and even local law. Estate taxes can significantly reduce the amount of wealth available to heirs, so proper legacy planning needs to involve understanding the rules and planning ahead to minimize taxation. An experienced financial advisory firm can ensure that clients have a comprehensive and legally binding plan in place that is designed to eliminate confusion, family conflict, unnecessary costs, and taxation when the time comes to transfer a legacy.

In addition to wills and trusts, inter-vivos trusts, also known as living trusts, play a crucial role in estate planning. These trusts allow individuals to transfer assets during their lifetime, effectively removing them from the probate estate. Living trusts provide numerous benefits, including avoiding the probate process, ensuring privacy, and facilitating a smoother distribution of assets to beneficiaries. Furthermore, within the context of wills, it’s essential to include advanced healthcare directives. These directives outline an individual’s medical preferences in case of incapacity, ensuring their wishes are honored and providing clarity to loved ones during difficult times.

An experienced financial advisory firm can ensure that clients have a comprehensive and legally binding plan in place that is designed to eliminate confusion, family conflict unnecessary costs, and taxation when the time comes to transfer a legacy.

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  • toomeyinvest
  • Estate
  • April 24, 2024

Maximizing Your Estate: Advanced Wealth Transfer Techniques

You spend a lifetime building up wealth. The last thing you want to see is the entirety of your estate going into the pockets of nursing homes, tax agencies, or hospitals. Most people strive to leave as much of their estate as possible for future generations, friends, and charitable causes. Unfortunately, many people leave their heirs with little due to medical and care requirements that come with advancing age.

To safeguard the wealth you’ve worked tirelessly to accumulate and ensure it benefits your loved ones and chosen causes, strategic planning is crucial. A comprehensive wealth management strategy aligned with your personal financial goals can make all the difference. Here are some of the many strategies often used to maximize an estate transfer:

Generation-Skipping Trusts (GST): A GST is a legally binding trust agreement that directs assets to grandchildren instead of children, primarily for tax efficiency. By sidestepping a generation in inheritance, estate taxes can be minimized. This doesn’t imply neglect of children but rather a strategic tax planning approach within a broader investment strategy.

Charitable Giving: Donations to charitable organizations not only fulfill philanthropic goals but also offer significant tax advantages. Whether through direct contributions, donor-advised funds, or charitable trusts, structuring your giving can yield tax benefits during your lifetime and within your estate plan. This proactive approach can reduce tax burdens on both your heirs and your estate while supporting causes that align with your values.

Tax-Efficient Gifting: Leveraging annual gifting limits is an effective way to diminish the size of your taxable estate. As of 2023, the annual gift limit stood at $17,000 per giver/receiver, with provisions for doubling or quadrupling for married couples. Exceeding these limits necessitates filing IRS Form 709 and accounting for gifts against the lifetime giving allowance. Planning these gifts with the help of a financial planner can optimize outcomes and support your long-term retirement planning goals.

In addition to these strategies, it’s crucial to be aware of asset management approaches such as asset spend-downs to qualify for Medicaid, especially if long-term care becomes necessary. Medicaid eligibility often requires individuals to meet specific asset thresholds, and spending down assets to qualify is a common practice. This can involve utilizing assets for approved expenses such as medical bills, home modifications, or prepaid funeral expenses.

Moreover, a Medicaid annuity can be a valuable tool in asset management and Medicaid planning. By converting excess assets into an annuity, individuals can create a stream of income that is exempt from Medicaid asset calculations. This strategy allows for the preservation of assets while meeting Medicaid eligibility requirements. However, it’s essential to navigate the complex rules and regulations surrounding Medicaid annuities with the guidance of knowledgeable financial and legal professionals.

By implementing these strategies and understanding the nuances of asset spend-downs and Medicaid planning, you can effectively protect your estate and ensure that your wealth serves its intended purposes for future generations, charitable causes, and personal legacies. These steps can also reinforce your broader investment strategy and support saving for retirement with greater confidence.

Seek Professional Investment Advice

To engage in the best possible estate and retirement planning, it’s worth seeking advice from a professional who can help you protect as much of your assets as possible while aligning with your personal financial goals. Toomey Investment Management, Inc. is a Wallingford, Connecticut-based financial advisory company that offers clients expertise in independent portfolio management and comprehensive wealth management solutions.

At TIMI, our business model is designed to treat all of our clients equally and fairly. We realized long ago that the financial industry dedicated many resources to capture money from prospective clients but much less on service and accountability for existing clients. At Wallingford, Connecticut-based TIMI, we listen carefully, keep in touch, and return your calls and communications quickly, so you can count on us. We will work effectively to optimize your financial situation and solve your problems—whether it’s through tailored asset management, smart investment strategy design, or focused support in saving for retirement.

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