Steve Balch, CFP®

Guiding High Income Earners To And Through Retirement | Build Wealth Early, Retire Tax Smart | CFP® | posts ≠ advice | Get organized ⬇

[Steve Balch, CFP® @StevenBalch]

When Should You Hire a Financial Advisor?

You may benefit from working with a financial advisor if:
•Your finances are becoming more complex
•You want a coordinated financial plan
•You’re approaching retirement
•You want to reduce lifetime taxes
•You value objectivity and peace of mind

[Steve Balch, CFP® @StevenBalch]

Why High-Net-Worth Retirees Should Be Spending More in Retirement

[Steve Balch, CFP® @StevenBalch]

https://t.co/X0JYx78hlO

[Steve Balch, CFP® @StevenBalch]

If you are sitting on a large, unrealized gain, selling might be the most expensive decision you ever make. Here is why holding it could be far more powerful:

[Steve Balch, CFP® @StevenBalch]

Many high-net-worth retirees don’t have a spending problem.

They have a permission problem.

They spent decades saving, investing, and being disciplined with money. Those habits helped them build wealth, but they can become difficult to turn off in retirement.

So what happens?

The portfolio keeps growing, but the experiences keep getting delayed.

The trip gets pushed another year.
The second home never happens.
The family experiences stay on the “someday” list.

Meanwhile, time keeps moving.

Good retirement planning isn’t just about making sure you don’t run out of money.

It’s about using your wealth intentionally while you still can.

That doesn’t mean spending recklessly. It means building a plan around what’s realistically possible, not just what feels emotionally safe.

A good retirement spending plan should account for:
• Actual portfolio return assumptions
• Social Security, pensions, and other income sources
• The “go-go, slow-go, no-go” phases of retirement
• Tax-efficient withdrawal strategies
• Flexibility to spend more in good years and adjust in difficult ones

Many retirees are more financially secure than they realize.
The challenge is no longer accumulating wealth.

It’s learning how to confidently use it for the life they spent decades working toward.

[Steve Balch, CFP® @StevenBalch]

Most high earners spend years building wealth.

But one lawsuit could put a large portion of it at risk overnight.

One of the biggest gaps I see in financial plans for high-income professionals and retirees has nothing to do with investments or taxes.

It’s umbrella insurance.

Most people assume their auto or homeowners policy is enough. In reality, many policies only provide $300k–$500k of liability coverage.

That sounds like a lot, until a serious accident happens.

A major car accident, injury at your home, teenage driver, rental property issue, boating accident, or even a defamation claim can quickly turn into a multi-million-dollar lawsuit.

And if the judgment exceeds your policy limits, your personal assets may be exposed.

Your investments.
Your savings.
Your future income.
Potentially even your home equity.

That’s where umbrella insurance comes in.

Umbrella coverage sits on top of your existing policies and helps protect against catastrophic liability claims.

The surprising part?

It’s often one of the cheapest forms of protection available.
Many $1M umbrella policies cost only a few hundred dollars per year.

A simple rule of thumb:
Your umbrella coverage should generally be at least equal to your net worth, and potentially higher if you have high income, rental properties, teenage drivers, or elevated liability exposure.

Building wealth takes decades.

Protecting it should be part of the plan too.

[Steve Balch, CFP® @StevenBalch]

Emergency funds are essential.

But too much cash? That could be slowing down your long-term growth.

Here’s a general rule of thumb:
3–6 months of expenses if your income is stable
6–12 months if your income is variable
18–24 months if you're retired

Anything beyond that could be losing value to inflation.

Here’s what I recommend:
• Determine the right emergency fund amount
• Set up automatic monthly transfers to a taxable investment account
• Let the excess cash work for you in a diversified portfolio

It’s not about being aggressive.

It’s about being intentional.

[Steve Balch, CFP® @StevenBalch]

4 Tax Moves to Make During a Low-Income Year (Before the Window Closes)

A lower income year might actually be the best tax planning opportunity you'll ever get.

[Steve Balch, CFP® @StevenBalch]

https://t.co/Z2YaUnJqJD

[Steve Balch, CFP® @StevenBalch]

The One Coverage Most High Earners Are Missing (And It Could Cost Millions)

[Steve Balch, CFP® @StevenBalch]

Should you use Roth or pre-tax 401(k)?

Most people pick one and never revisit it.
But the better answer often changes as your income changes.
The real question is not whether Roth or pre-tax is better in general.

It is this:
Are you better off paying taxes on those dollars now, or later?

A simple framework:
• Pre-tax often makes more sense when you are in a high tax bracket today and the deduction is especially valuable
• Roth often makes more sense when your tax rate is relatively low and you expect income to rise over time
• A mix of both can make sense when the future is less clear

One important distinction:
Pre-tax contributions save taxes at your marginal rate today.
Retirement withdrawals are often taxed more gradually across multiple brackets.

That is why pre-tax contributions can be especially valuable during peak earning years, while Roth contributions may be more attractive earlier in your career or in lower-income years.

You do not have to treat this as an all-or-nothing decision.
In many cases, the smartest approach is to revisit the choice as your income, tax bracket, and retirement outlook evolve.

A good rule of thumb:
• Higher bracket today. Lean pre-tax
• Lower bracket today. Lean Roth
• Middle ground or uncertainty. Consider splitting contributions

The goal is simple:
Pay the lowest tax rate possible over your lifetime, not just this year.

[Steve Balch, CFP® @StevenBalch]

Asset Location Matters as Much as Asset Allocation

For high-income earners and retirees, where you hold your investments can be just as important as how you allocate them.

Tax-inefficient investments, like actively managed mutual funds, held in the wrong accounts can trigger unnecessary taxes and surcharges.

- High-income earners: Pass-through capital gains can mean unexpected tax bills.
- Retirees: These capital gains can push you into higher Medicare brackets, leading to IRMAA surcharges.

Strategic asset location can help minimize taxes and keep more of your money working for you.

[Steve Balch, CFP® @StevenBalch]

Building wealth is one thing. Being able to use it when it matters is another.

I've worked with many high earners who have done a great job accumulating assets, retirement accounts, real estate, business interests, and private investments.

Their net worth looks strong on paper.

But when a big opportunity or need comes up, accessing that wealth isn't always easy.
That's the liquidity problem. And it's the missing piece in more financial plans than you'd think.

Here's what illiquidity actually looks like in real life:
•Selling investments in a down market just to raise cash
•Missing an opportunity because funds were tied up
•Taking on expensive debt to cover a short-term need
•Being forced into decisions based on urgency, not strategy

Real liquidity isn't about how much cash you hold. It's about how easily you can access capital without disrupting your long-term plan.

Liquidity = options. Options = control.

A strong liquidity framework for high earners typically includes five things:
1.A dedicated reserve sized to your lifestyle — not a generic rule of thumb
2.A deliberate balance between liquid and illiquid investments
3.Borrowing access (lines of credit, securities-backed lending) set up before its needed
4.Coordination across taxes, estate, and business planning
5.Regular stress tests. What happens if income drops or markets fall 20%?

Your net worth tells you what you have. Liquidity determines what you can do with it.

If your plan doesn't address liquidity, it's not a complete plan.

[Steve Balch, CFP® @StevenBalch]

https://t.co/nm7VhuRae0

[Steve Balch, CFP® @StevenBalch]

What to do if you are expecting a big income year

[Steve Balch, CFP® @StevenBalch]

If you had to answer these today, could you?
•What’s your after-tax income?
•How much are you saving monthly?
•Where will you take money from in retirement?

If not, don’t worry.

Most high earners I work with couldn’t either, until we built a plan together.

[Steve Balch, CFP® @StevenBalch]

What’s it like to work with me?

It starts with a conversation so I can learn your goals, priorities, and what financial peace of mind really means in your life.

Next, you complete a risk assessment to determine your personal risk score. This helps me understand how much market risk you’re truly comfortable with and whether your current portfolio is moving at the right speed for your goals.

From there, we take a complete look at your financial life:

•Is your portfolio aligned with your risk score?
•Are your taxes being managed efficiently?
•Do you have the right savings structure in place?
•Are your insurance coverages appropriate for your stage of life?
•Is your estate plan up to date—and built to reflect your wishes?

I try to uncover blind spots and highlight opportunities. Then, I build a plan that simplifies your financial life and gives you confidence moving forward.

Real financial planning isn’t just about investing.

It’s about ensuring every piece of your financial life works together.

[Steve Balch, CFP® @StevenBalch]

One of the biggest hidden risks in many portfolios? Stock concentration. Whether it’s RSUs, early investments, or emotional attachment, too much of your wealth tied to a single company can become a major blind spot.

Take PayPal, trading over $300 in 2021, now under $100.

How would that impact your retirement if that was 50% of your portfolio?

Here’s what to do:
- Don’t panic-sell, but don’t ignore the risk
- Unwind your position over time with tax-smart strategies
- Consider charitable gifting or exchange funds for diversification
- Consider Tax Aware Long Short Strategies

You don’t have to take on unnecessary risk.

There are ways to reduce exposure without a giant tax bill.

[Steve Balch, CFP® @StevenBalch]

https://t.co/fylRiAMsTr

[Steve Balch, CFP® @StevenBalch]

Two reviews. Spring and fall. Every year.
Most people are focused on what their portfolio returns.
We're focused on what you actually keep after taxes.
That's a different number. And usually the more important one.
Save this and share it with someone who needs a better tax process.

[Steve Balch, CFP® @StevenBalch]

Tax season ended last month and your tax return can be a vital document for planning this year,
Here's what a real tax review process looks like with us and why it happens twice a year 🧵

[Steve Balch, CFP® @StevenBalch]

Then fall arrives.
By October, the year's income picture has come into focus. We run a second review before it is too late. Once January hits, most of the tax levers are gone.
So we ask:
-Is our spring plan still on track? Do we need to adjust?
-Are there losses or gains to harvest?
-Are Roth conversions still on the table?
-Are RMDs handled?
-Are estimated taxes and safe harbor covered?
-Is there tax bracket room left to use?