Maximize Opportunities When You Are A High-Net-Worth Individual

You've Built Your Wealth; Now You Need to Manage It

Maximize Opportunities When You Are A High-Net-Worth Individual

If you’re a high net worth individual, chances are you have worked very hard to amass your wealth. Now, it’s vital to work equally as hard to manage that wealth to continue to benefit you and your family. That means paying close attention to your unique circumstances and being thoughtful and diligent about your high-net-worth financial planning.

Wealth Creation

The United States boasts 6.6 million high net worth individuals, referred to as HNWIs in the Wealth Opportunity Index.  This means there are more HNWIs in America than in Canada, the UK, mainland China, Hong Kong (SAR) and Singapore combined. The ability of Americans to generate wealth is unmatched, yet these opportunities can be easily squandered when HNWIs fail to properly save for the future. The best way to protect your wealth is to determine a financial plan you can follow over the long-term.

SEE ALSO: Understanding the ‘Rich Person Roth’

Future-Proofing Your Savings

No two financial plans are alike, as they take into account your particular circumstances and goals. Though you may have been focused on wealth creation in the past, your financial plan will usually prioritize protecting your wealth over increasing it. If you want to ensure your long-term financial wellbeing and pass your wealth along to your children, then a long-term strategy is necessary. This is particularly important because of the construction of the U.S. economy, which monetizes and commoditizes all our needs – needs that increasingly require more money. For example, the amount needed to retire without being a burden on your children means planning for health care and long-term care needs, both of which can cause worry for retirees afraid of running out of money.

Perhaps, this is why so many HNWIs view saving for retirement as a top goal, with the secondary goal of preserving some of their wealth for their heirs, too. Frustratingly, many of the obstacles to these goals are outside of your control, even if you are a high net worth individual. The rising cost of living and raising a family, the steady increases in college tuition costs, possibly needing to care for children and aging parents simultaneously, and increasing health care costs are among the most common. Given all these factors, it can be difficult to feel financially reassured.

Planning Fundamentals

In your quest for more confidence in your long-term financial outlook, there are a few essential areas you’ll want to attend to as part of your high net worth financial planning process:

Tax Planning

Everyone must deal with taxes, but proper planning is crucial for HNWIs. When you have amassed a large amount of wealth, there is more to think about than just your income tax. If you don’t have an intelligent tax strategy on your side, you can easily end up paying more than you need to. A tax professional can help you with your planning for capital gains taxes and gift and estate taxes, in particular.

Estate Planning

Estate planning is the systematic approach to organizing your personal and financial affairs in order to deal with the possibility of mental incapacity and the certainty of death.  Without a proper estate plan to address issues relating to mental or physical incapacity and death, you could give your loved ones unneeded headaches and unnecessary costs relating to handling your estate. 

Besides having these three essential legal documents (Will, Health Care Directive, and Durable Power of Attorney), you may wish to set up a revocable living trust to hold your non-retirement account assets.  The assets inside your revocable trust are not subject to probate.  They can be distributed immediately to beneficiaries or be managed by the successor trustee to distribute to them over time, depending on how you wrote your trust provisions.  By avoiding probate, these assets and their beneficiaries remain private – since probate is entered into the public record – and are efficient and therefore cheaper in terms of attorney fees after your death.  Generally, probates also take much longer to complete than the administration of revocable trusts.

In 2021, federal estate and gift tax exemption is currently at $11.7 million per person or $23.4 million for a married couple.  Minnesota’s estate tax exemption is $3 million, so only estates larger than $3 million will owe the state estate tax.  It’s time to review your estate plan to see if a revision is necessary as the estate exemption amount may be reduced in the future. 


The fundamentals of a robust investment portfolio aren’t different for HNWIs. However, your goals may be different, as well as your risk tolerance and your time horizons. If you have a longer time horizon, your risk tolerance may be higher, and vice versa. Your investment strategy will likely need regular adjustments over time to keep pace with your goals.

Retirement Planning

Your tax planning strategies and your investing strategies will play a role in proper retirement planning. Tax-advantaged retirement accounts, like 401(k) or IRA accounts, can strengthen your investment plan and build your savings, but you’ll need to determine the best plan for you. For instance, contributions to both the traditional 401(k) plans are tax-deductible, but you’ll pay income tax on your future withdrawals, while Roth 401(k) plans and Roth IRAs won’t get you a break at contribution but won’t be taxed when you withdraw either.

SEE ALSO: When to Pivot Your Career (And How to Pull it Off Financially!)

Choosing Partners in Planning

If you feel trepidation about tackling the above on your own, you’re not alone. Many people lack confidence in their own financial planning, which is certainly true of many HNWIs. A lack of financial management knowledge also contributes to discomfort about preserving wealth for the future. In simple terms, a financial plan is a comprehensive breakdown of your financial goals and your methods for achieving them. High net worth financial planning doesn’t have to mean drastic changes to your spending or saving. Still, it does mean thoughtfully reviewing your finances and being intentional about your money moves.

It’s often helpful to utilize a financial advisor's services to determine whether your savings and investment strategies are sufficient to support your financial goals – while also leaving room to handle unexpected financial hurdles, such as a job loss, disability, or divorce.

If you want to protect your financial wellbeing and preserve your wealth for the future, don’t delay. Beginning to plan right now is essential, and ensuring you could adapt to a sudden financial change is a good place to start. A financial advisor can help you review your goals, your investment portfolio, your retirement planning strategy, and more while taking into account things like age and lifestyle to create a financial plan that serves your needs.

At Echo Wealth Management, our focus is on taking the complexity out of wealth management. If you’re interested in starting a conversation about your personal financial planning, please reach out to us today so that we can begin a dialogue.

3033 Campus Drive, Suite N145
Plymouth, MN 55441


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