How to Develop the Best Professional Finance Strategy

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    How to Develop the Best Professional Finance Strategy

    We all know that a professional finance strategy is what separates the masses from the financial planners. While the masses will go to any financial institution and purchase whatever product that they can find, the professionals will always invest their money in superior financial products that truly protect their portfolios and profit in the long-run. So what should we expect when we start looking at the top-rated financial products and how to incorporate them into our financial strategy?

    Use Tax Savings Strategy to Gain Tax Efficiency

    More and more financial advisors are using tax-friendly strategies to grow the top of the funnel and develop more qualified prospects and retain existing ones. Instead of selling products that generate an additional tax bill for the financial advisor, it makes more sense to focus on tax-efficient strategies and investments. Some of the top-rated financial products are:

    Health Savings Accounts (HSA): Accounts are not taxed from the start but have to be spent by the end of the tax year, after the end of the calendar year. As long as the money stays within the account, it is tax-free for the year in which it is used. One of the advantages is that the funds can be used during the year to pay health insurance premium or post-retirement health insurance fees. Plus, they provide tax relief for the participant.

    You can use your HSA funds to invest and grow them as long as you pay the required contribution. Some advisors recommend the use of a tax-free transaction account to help with tax-saving strategies. For instance, an HSA with a post-retirement income requirement could be used to use the tax savings with investments and grow the assets.

    Comprehensive Insurance Coverage: You can use tax-advantaged vehicles such as 529 College Savings Plans or 529 Plans to make financial contributions to the education expenses of the children. This way, you can save on the taxes and the funds grow tax-free for many years. A few of the best tax-advantaged education funds are:

    Nuclear Insurance Premium Account: A post-retirement insurance plan, which is run by the College Board, provides high-quality insurance coverage through an education savings plan. The policy is issued by GE Insurance to cover tuition, education and after-school costs of a child in college, for a total of $25,000.

    Earned Income Tax Credit (EITC): The tax deduction provided by the EITC can be used to invest in tax-advantaged college savings plans. As long as the financial plan has to be in place for six months after the child is born, it can be used to make a 529 College Savings Plan contribution and earn the post-tax return.

    Income Distributions: In an income distribution plan, the asset generation happens as long as the contribution is made during a tax year, after the end of the calendar year. The money is paid in a lump-sum to the beneficiary. If the plan requires regular distribution from the end of the year, the distribution can be done quarterly.CFOshare Fractional CFO can help you navigate what is clearly a very big and specialised world of professional financial strategy development.

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    Written by Jenson Phillips

    Hi, I'm Jenson. Father of two and living with OCD, read my musings on coping with both and maybe pick up some advice for yourself.