As an executive, you’ve worked hard in your career to reach your current position. But for many, with career success comes little time to focus on financial planning. You’re not alone if you haven’t dedicated the time to getting your finances in order and having a roadmap you can follow to pursue your short and long-term goals.
At Newbridge Wealth Management, we have worked with a number of entrepreneurial executives in the healthcare and technology industries, helping them make the most of their company’s retirement plan and other benefits and integrating them with their financial planning strategies. Over the course of our years working with these clients, we’ve discovered that, while all have unique concerns and needs, many face the same five financial planning challenges.
1. When Should I Exercise And Sell My Stock Options?
Most likely, your company has given you a variety of restricted stock and stock options at different times and for different amounts. Vesting dates probably vary between the two, as well as expiration dates. With so many different dates involved, it’s easy to overlook a deadline. So many people miss out on their stock options because they plan to exercise them at the last minute, only to get distracted or simply forget. Not exercising your stock options is akin to throwing money away.
If you want to make the most of your employee stock benefits, you need to get organized. There are strict deadlines if you want to take advantage of some of the available tax savings. Having a well-organized system for tracking dates and amounts can save thousands in taxes and prevent you from missing out on expired options. We work with clients to help them keep track of these dates and determine appropriate strategies.
2. Should I Choose A High Deductible Health Care Plan?
Healthcare prices have been steadily rising and it doesn’t look like that will change any time soon. Group insurance is more attractive than ever due to the fact that your employer helps to cover some of your premium. Most plans have a deductible that must be met before the co-pay prices kick in. The copays can range anywhere from $15-$50 per visit, plus co-insurance for any services and medications you may need. On top of that, many plans have maximums and limitations set on how much they will pay out. With all these variables it is crucial that you choose a plan that does not leave you both paying a high premium and picking up a sizeable bill post service – especially in a catastrophic event.
While the premium is usually the foremost factor people use in choosing a plan, choosing the cheapest plan can leave you with inadequate coverage, which can result in higher out of pocket expenses overall. Therefore, considering what is most important first and premiums last ensures that you will choose a plan based on what is truly important for you. We work with our clients to review their insurance plan options and which makes the most sense for them.
3. Should I Switch Companies?
High level executives frequently move from company to company in order to advance their career or experience a new opportunity. However, it’s a big decision to make the switch, from comparing schedules and job roles to pay schedules and benefits, including stock options, 401(k) plans, insurance, and other financial incentives.
As advisors who specialize in serving entrepreneurial executives, we frequently consult with clients to help them review their next job opportunity, as well as the financial benefits available and how it fits into their career objectives, family’s needs, and financial goals.
4. How Should I Pay For College? Should I Fill Out The FAFSA?
When the average annual tuition for an in-state public college is $24,610, and $49,320 for a private college, planning far in advance is essential. (1) With such high tuitions, many families are more concerned with how they’ll pay for their child’s college education than how they’ll fund their retirement.
Many people don’t realize the many resources available for paying for college, from scholarships and grants to loans and savings. In particular, affluent families may worry that they aren’t eligible for financial assistance. From navigating FAFSA to exploring financial planning options, like 529 plans, we help clients establish a plan for their child’s education.
5. Should I Buy An Investment Property?
Owning investment property is not for the faint of heart. There are many variables and situations that can arise, so it’s crucial that you plan ahead for how you will deal with them. For example, do you have enough money in an emergency fund to handle a vacancy? If you don’t, would you need to borrow money from family? Would you need to borrow from your 401(k)? Or, if you were to face a financial setback and pass away prematurely, would your spouse be able to continue managing the property? If both you and your spouse pass and the property goes to your kids, would they know who to contact and how to continue managing the property? You may find that if you haven’t updated your estate plan to prepare for these contingencies, you may want to consider doing so.
Owning an investment property can be an incredible way to bring in cash flow and reach long-term goals, but make sure you cover your bases and ask yourself a few essential questions before jumping into this new venture. We can work with you to explore whether or not an investment property makes financial sense for your family.
We believe entrepreneurial executives often choose to work with us because we are a high touch and proactive firm. We aim to be someone they can trust to guide them toward their ideal retirement.
Helping so many people in our community drives us every day in our careers. We enjoy meeting with executives and their families to learn about their goals and see if we may be able to help.
Vincent R. Barbera, CFP®, MSFS is a managing partner and co-founder of Newbridge Wealth Management, a private financial counseling firm located in Berwyn, Pennsylvania. Believing in a patient, disciplined approach to investment management that delivers value and peace of mind, he utilizes a process-driven approach to financial planning that provides comfort and clarity to his client’s long-term goals. Along with a bachelor’s in psychology and business, he has a master’s in business and financial planning and Certified Financial Planner™ designation. Learn more by connecting with Vincent on LinkedIn or send him questions at firstname.lastname@example.org.