• How Inflation Impacts Wealth Management and Investment Strategies

    Navigating High Inflationary Periods and Protecting Your Wealth Over Time

    Inflation is an economic concept that describes the increase in the cost of goods and services over time. As inflation rises, the purchasing power of your money decreases – which you may feel in your daily life. However, it can also have a significant impact on your long-term wealth management and investment strategies. In this article, we’ll explore how inflation impacts wealth management and investment strategies and provide tips on how to navigate inflationary periods.

    Erosion of the Value of Money

    Inflation can have a significant impact on the value of your money. As prices rise, the purchasing power of your money decreases, which means you can buy fewer goods and services with the same amount of money. This erosion of value can have a significant impact on your wealth management and investment strategies, regardless of your stage in life. If you’re still working and building a nest egg, it may mean you’re able to save or invest less than you can in periods of lower inflation. If you’re already retired, it may mean you need to adjust your withdrawal strategy to pay the bills, which means your nest egg may not last as long as you had planned.

    Investment Returns May Not Keep Pace

    Inflation can also have an impact on investment returns and require you to take a closer look at your portfolio. While investments can generate returns over time, those returns may not keep pace with inflation. For example, if inflation is 3% per year, and your investment returns are only 2%, your purchasing power will still decrease over time. If you find yourself in this situation, you’ll want to consider seeking out investments that provide returns that are higher than the rate of inflation in order to better protect your wealth.

    Diversification Becomes Even More Critical

    Diversification is always a smart option, but it becomes a key strategy for wealth management and investment in inflationary periods. By diversifying your investments across different asset classes, you can spread your risk and reduce the impact of inflation on your overall portfolio. For example, investing in stocks, bonds, and real estate can provide a more balanced portfolio that is less vulnerable than a portfolio that is more heavily weighted toward inflationary shocks.

    You Might Consider Inflation-Protected Securities

    Inflation-protected securities (IPS) are investments that are specifically designed to protect against inflation. These securities are typically linked to the Consumer Price Index (CPI), which measures inflation, and they provide returns that are adjusted for inflation. IPS can provide a hedge against inflationary periods and can be a valuable tool for wealth management in times of high inflation.

    Mitigate Impact with Tax-Efficient Investment Strategies

    If you’re not already practicing tax-efficient investment strategies, you’ll want to begin for a number of reasons – not the least of which is that doing so can help mitigate the impact of inflation on your wealth. By investing in tax-efficient vehicles, such as 401(k) plans, IRAs, and municipal bonds, you can reduce the amount of taxes you pay on your investment returns, which can help boost your overall returns and protect your wealth against inflation over the long term.

    Would You Like to Learn More About How Inflation Impacts Wealth Management and Investing?

    Inflation can have a significant impact on wealth management and investment strategies, and on your day-to-day life, too. By understanding how inflation erodes the value of money, considering diversification and investing in inflation-protected securities, and taking advantage of tax-efficient investment strategies, you can take steps that may help protect your wealth and stay ahead of inflationary periods. With careful planning and a diversified portfolio, you can better navigate inflationary periods and continue building wealth over time.

    If you’d like to discuss more about how inflation impacts wealth management, contact Lane Hipple Wealth Management Group at our Moorestown, NJ office by calling 856-638-1855, emailing info@lanehipple.com, or to schedule a complimentary discovery call, use this link to find a convenient time.

    Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.

  • Inheriting Wealth: How to Preserve and Grow Your Family’s Legacy

    Inheriting wealth can be a life-changing event, but it also comes with a great responsibility to preserve and grow your family’s legacy. Whether you receive an inheritance from a parent, grandparent, or another family member, it’s important to have a plan in place to use the wealth wisely and continue to benefit future generations. In this article, we will provide guidance on how you might preserve and grow your family’s legacy after inheriting wealth.

    Educate Yourself on Financial Management

    To effectively manage an inheritance, it’s important to have a basic understanding of financial management. This includes knowledge of financial concepts such as budgeting, saving, investing, and debt management. If you don’t have this knowledge, consider taking a personal finance course or working with a financial advisor to develop a financial plan that aligns with your goals and values.

    Assess Your Current Financial Situation

    When inheriting wealth, it can be tempting to make big moves right away, such as paying off your mortgage. However, before making any decisions with your inherited wealth, take the time to assess your current financial situation. This includes reviewing your income, expenses, debts, and any existing investments or savings. By having a clear understanding of your financial position, you can make informed decisions about how to best use your inheritance to benefit your family now and into the future.

    Consider Tax Implications

    Inheriting wealth can also come with tax implications. Depending on the type and size of the inheritance, you may be subject to estate or inheritance taxes. It’s important to understand these tax implications and work with a financial advisor or tax professional to develop a tax strategy that minimizes your tax liability and preserves your family’s wealth.

    Related Article: Passing an Inheritance To Your Children: 8 Important Considerations

    Develop a Long-Term Plan

    When inheriting wealth, you may want to develop a long-term plan that considers the needs of future generations. This includes setting financial goals, developing an investment strategy, and creating an estate plan. Research shows that up to 70% of families lose their wealth by the second generation, so having a long-term plan can help your family avoid that common fate.

    Communicate with Your Family

    Inheriting wealth can be a sensitive topic, and it’s important to communicate with your family about your plans and intentions. This includes discussing your long-term plan, setting expectations, and ensuring that everyone is on the same page. Open and honest communication can help prevent misunderstandings and ensure that your family’s legacy is preserved.

    Consider Philanthropic Opportunities

    Inheriting wealth can also provide opportunities to make a positive impact on your community and the world. Consider philanthropic opportunities that align with your family’s values and interests. This can include donating to charitable organizations, establishing a family foundation, or funding scholarships for deserving students.

    Final Thoughts on Inheriting Wealth

    Inheriting wealth can be a life-changing event, but it also tends to come with feelings of responsibility to preserve and grow your family’s legacy. To effectively manage an inheritance, it’s important to educate yourself on financial management, assess your current financial situation, consider tax implications, develop a long-term plan, communicate with your family, and consider philanthropic opportunities. By taking a thoughtful and strategic approach, you can preserve and grow your family’s wealth and leave a lasting legacy for future generations.

    If you think you would benefit from a conversation about inheriting wealth, contact Lane Hipple Wealth Management Group at our Moorestown, NJ office by calling 856-638-1855, emailing info@lanehipple.com, or to schedule a complimentary discovery call, use this link to find a convenient time.

    Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.

  • The New Retirement Rules

    Highlights of the SECURE Act 2.0

  • 5 Ways a Financial Advisor Can Help You Prepare for Tax Season

    A Strong Tax Strategy is Part of a Thoughtful, Comprehensive Financial Plan

    Tax season is upon us and, while not every financial advisor is a Certified Public Accountant (CPA), that doesn’t mean they can’t be helpful. Your financial advisor can assist you with making strategic tax moves throughout the year to help reduce your overall tax burden. As you read below, keep in mind that the sooner you begin having these conversations with your advisor about your tax strategy, the better off you’ll be at tax time.

    Finding Ways to Maximize Your Tax Savings

    There are many financial moves you can make throughout the year that will result in paying lower taxes, and a financial advisor will be educated about them. For example, some investment accounts let you make tax-deferred contributions, which can offer you the opportunity to save money on taxes while working to build your retirement savings. Take a company-sponsored 401(k), for instance. If you max out your contributions to this account, all of the money going in is pre-taxed, so you’ll be putting money away for retirement while reducing your tax bill in the present.

    Keeping Record of Your Capital Gains and Losses

    When filing your taxes, you’ll have to know how much you earned and lost from your investments for that year. A financial advisor will have an accurate and consistent record of your investments, which they can give to your accountant on your behalf. This will save you time and energy, and help you ensure you’re paying appropriate capital gains tax, without over-paying.

    Developing a Tax-Savvy Gifting Strategy

    There’s a lot to be gained when we gift our money to others. Not only do you get the intrinsic rewards associated with the joy and meaning that comes from helping others, but you can enjoy valuable tax benefits, too. Sit down with your financial advisor and discuss how you can gift your money in ways that ultimately help lower your tax bill, too. And this isn’t just for charities; if you want to give money to your family members for any reason, there are plenty of gifting strategies that let you transfer your wealth without a tax penalty. Check-in with your financial advisor before making any gifts so you can be sure to maximize the opportunity.

    8 Considerations For Passing an Inheritance To Your Children

    Minimizing the Tax Burden that RMDs Bring

    Once you reach the age of 73, you’ll have to begin taking out Required Minimum Distributions (RMDs) from any IRA or 401(k) accounts that you have. While this comes as no surprise, often the uptick in your tax bill from having to pay income tax on those distributions does come as a surprise to retirees. A financial advisor will be able to provide you with management strategies so that you can lower your tax liabilities and be more prepared when the time comes to begin taking distributions.

    Determining Tax-Efficient Investment Strategies

    Although a financial advisor can’t necessarily protect you from capital gains tax, they will be able to help you by implementing strategies such as tax-loss harvesting, offsetting gains with losses, and avoiding issues such as “phantom tax,” which limit your overall tax liability. So, they’ll not only be able to help you manage and balance a portfolio, but they’ll be able to ensure you’re following the best investment strategies to benefit you the most when it comes time to file your taxes.

    Do You Need a Financial Advisor to Assist with a Tax Strategy?

    The world of taxes can be incredibly confusing, especially considering they’re constantly changing depending on the economy and new legislation. Having a financial advisor you trust is an important addition to your tax planning arsenal. A financial advisor can guide you throughout the year to ensure you’re making the best financial choices to help boost your tax strategy, with the ultimate goal of allowing you to save more of your hard-earned dollars.

    If you think you would benefit from a conversation about your tax strategy, contact Lane Hipple Wealth Management Group at our Moorestown, NJ office by calling 856-638-1855, emailing info@lanehipple.com, or to schedule a complimentary discovery call, use this link to find a convenient time.

    Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.

  • 5 investment ideas for small-business owners struggling to keep their finances liquid

    Three local financial experts share their advice.

    Andrew Hipple has advice on how small business owners (and individuals) can take advantage of the rise in interest rates.
    Andrew Hipple has advice on how small business owners (and individuals) can take advantage of the rish in interest rates. (photo credit: Steven M. Falk / Inquirer Staff Photographer)

    Written by Gene Marks

    Even as commercial lending rates have more than doubled in the last year, interest rates earned on checking, money market and savings accounts remain stubbornly low as banks seek to maintain their profitability.

    That’s not helpful for business owners, who need to earn money on their cash reserves while keeping enough liquidity to meet faily working capital needs. Options remain limited, but the environment is slowly changing, and a number of investment choices with minimal risks are emerging.

    Click here to read full article from the Philadelphia Inquirer, featuring Andrew Hipple CFP®, Partner at Lane Hipple Wealth Management Group.