Frequently Asked Questions
We share a few common situations below that illustrate how our role empowers clients to confidently make decisions about their finances.
Your fiduciary is an agent who is legally required to serve in your best interests. One of the most common fiduciary roles is that of trustee. When our advisors serve in this capacity, our fiduciary duty obligates us to make prudent and ethical decisions about your trust assets that procure the most favorable outcome for you.
Your relationship with a fiduciary allows the fiduciary to comprehensively understand your unique assets and financial goals will shape the options and actions related to your asset management. When you work closely with a trusted fiduciary, your best interests are held in the highest regard under law. If forthcoming tax legislation could negatively impact your trust assets, it would be your fiduciary’s duty to act in a way to minimize or prevent tax consequences. In this situation, the fiduciary might change the tax situs of the trust to a jurisdiction with more favorable tax regulations.
Our financial advisors regularly develop financial plans for self-employed individuals due to the unique self-employment (SE) tax, Social Security and Medicare taxes, and tax deductions they manage. Unlike employees on payroll, self-employed individuals must calculate and separately pay SE, Social Security, and Medicare taxes in quarterly estimate payments. We help entrepreneurs, solopreneurs, freelancers, independent contractors, and other self-employed business owners properly plan and budget for estimated payments. Beyond the taxes that apply to earned income, self-employed individuals also have tax deductions that can help reduce their taxable income. Depending on their industry, some self-employed persons have more tax deductions available than others. Our ongoing relationship with clients helps to identify optimal deductions so that clients can minimize their annual tax burden, which can provide substantial savings over time.
Self-employed individuals have several options when saving for retirement, ranging from SIMPLE IRA and self-employed 401(k)s to Simplified Employee Pension (SEP) and Keogh plans. Each plan has unique tax benefits, tax deferral options, contribution limits, and other variables. Many individuals transition from salaried work as an employee to starting their own business. In these situations, the newly self-employed individual might have a retirement plan sponsored by their former employer. Once they start their own business, the plan might need to be rolled over into a new one that allows the self-employed individual to make contributions on their own. Experienced with these situations, our advisors review existing plans and explain every available option for establishing a new one. We also help self-employed individuals start their first retirement plan.
Answers to Retirement Questions
Carolina Wealth Partners helps answer the important questions about retirement planning.
We work with you to review your assets, retirement goals, lifestyle and unique needs to determine when to make retirement contributions, how much to contribute, and how often. Of course, it’s never too early to start contributing to a retirement fund. However, a plan can help provide peace of mind that the contributions you’re making now will support what you need later on. Many variables contribute to optimal contributions, especially if you’re interested in retiring early.
One of the key matters we review during retirement planning are your existing assets and savings. Apportioning assets and investments will hinge on the nature of the assets and funds in question. Asset management involves discussions regarding whether you want to ensure your investments are shielded from creditors in retirement, accessible to a spouse or partner should they outlive you, and more. Our advisors also review trusts and estate planning efforts, such as Medicaid Trusts and Miller Trusts, that can optimally structure assets for retirement.
As of this writing, Medicare becomes available when you reach age 65. However, you might retire before then or need supplemental coverage past 65. Our financial advisors help bridge gaps in retirement coverage during retirement, and advise on Long-Term Care (LTC) strategy to prevent depletion of assets should health decline unexpectedly.