Financial PlanningRetirementTax Planning

Continuing the tax planning conversation

A big part of the tax and financial planning conversation I’m having lately with local upper middle class people my age and older is questioning the wisdom of keeping multiple houses especially those big vacation places at the Jersey shore. (Some have houses and condos elsewhere but shore houses seem to dominate life for many of my clients, family, friends and neighbors). Many view their big expensive beach house as a crowning achievement to a lifelong goal where family gathers and the whole concept holds much emotional value. But I see big drop in value coming for the shore along with rapidly increasing tax, insurance and maintenance costs. There are better strategies to achieve the same emotional benefit with better tax results.

It’s not rocket science but ‘buy low, sell high’ still applies even now as we struggle to find solutions to our changing world.

Also, making better use of qualified benefits and tax free small business investments can make a big difference in taxes and long term retirement income.

Many of these clients took a financial hit from the Tax Cuts and Jobs Act. There is talk of repealing the SALT deduction limitations and restoring employee business expense deductions. We should not count on it. It likely makes more sense to act now to improve cash flow, reduce overall taxes, and strengthen financial positioning for a long retirement ahead.

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