2025 Financial Planning Guide

Financial Planning Guide 2025

Financial Independence/Retirement Planning

• Are you on track on your pursuit of Financial Independence?
  • An area we spend a good amount of time on with our clients is quantifying what they need to be financially independent.  This is where you are going to work every day because you want to, NOT because you have to financially.
  • We do this by marrying what you need to what your lifestyle is spending wise.
  • If you don’t know where you stand here, it’s a good idea to set up a review meeting with our office to update your overall financial plan.
• What kind of life do I want to live while working and in retirement?
  • This is equally as important to tracking your expenses.
  • Why? Because there is a lot of general advice that is spewed out on the internet, by close friends and relatives, and acquaintances.  Does all of it apply to you?  Likely not.  Why?  Because financial advice is not a “one size fits all” area.  Everyone lives different lives and has different values.
  • We can craft a plan that puts this in perspective to YOU.  Not someone else.

Cash Flow Planning

 

     Pre-Retirement

• • Are you saving enough each year into the right “buckets” to meet your financial independence goals?
    • We are big proponents of maxing out retirement plans afforded to you and paying down debt where needed.
    • Take a look at our 2025 tax guide to give you more guidance on where you can save in a tax efficient way for retirement (i.e. company 401(k), IRA, Roth IRA, etc.).
    • Feel free to reach out to us if you have more questions here.
  • Are you on top of what your spending is?
    • A very common thing we see is people loosely tracking what their spending is while working.
    • It is super important to have a good handle on what your overall spending so you can get a gauge on how much you would need income wise if you were not working.  It’s also a very good exercise to write down where you are spending so you can see it visually and make adjustments to expenses you find value in or not.

     In Retirement

• • Is your income from pensions, Social Security, and retirement accounts covering your needs?
    • Many retirees live on a fixed income.  It’s important to line up what you are taking out of your investments to what your goals/objectives are in life.  If you have questions here please reach out.

     Unexpected Events

• • Do you have a plan for covering unexpected expenses, such as medical emergencies or major home repairs?
    • We advise all clients to have an “emergency fund” for these unexpected expenses.  If you’re not sure how much you should have, we generally advise 3 to 6 months worth of expenses.  It should be an amount that makes YOU comfortable.

Investment Planning

 

     Portfolio Review

• • Are all your accounts (including outside accounts) appropriately diversified and aligned with your risk tolerance and financial goals?
    • If you’re working towards your financial independence goal, your investments should line up with helping you pursue your goal
    • Most clients in retirement are looking to “make it”.  It’s important that your portfolio is set up to address this.
    • Feel free to reach out if you have questions.

     Tax Efficiency

• • Are your investments structured in a way that minimizes taxes?
    • As financial and tax professionals, we are focused on having your investments be as tax efficient as possible.
    • Are taxes a primary focus?  No.  You are trying to make smart financial decisions first.  Taxes come in second place here.  But we are trying to make smart financial decisions while trying to minimize their tax impact.
    • Please reach out if you have questions here

Risk Management

 

     Family Protection

• • Do you have adequate life insurance coverage to ensure your loved ones are financially secure in the event of your passing?
    • This is incredibly important to younger families.   Especially with mortgages, unfunded future college costs that haven’t reached financial independence.  It’s too expensive NOT to be adequately covered.
    • We are philosophically more of a “buy term, invest the difference” approach when it comes to this protection.
    • Please reach out if you have questions.

     Disability and Long-Term Care

• • Would you be financially stable if you were unable to work due to a long-term disability?
    • It’s very important that people still working who haven’t achieved financial independence have some sort of long-term disability coverage
    • Reach out to us to see if you are in the most appropriate position here.
  • Do you have a plan in place for potential long-term care needs, such as a long-term care insurance policy or dedicated savings?
    • This is a big area we focus on in many financial plans and is a very very complicated area.
    • If you have questions on what strategy makes the most sense for you please reach out.

Taxes

 

     Income Tax Planning

• • Are you taking advantage of all available tax deductions and credits in 2025, such as retirement plan contributions, HSA funding, or charitable giving?
    • We strive to make sure you are taking advantage of all legal tax savings afforded to you
    • For our tax clients, our tax and wealth management teams will be coordinating with you to make sure you’re taking advantage of what strategies make sense for you.

 

     Tax Efficient Withdrawals

• • Where we help clients immensely is figuring out where they take their income/distributions from in retirement.
    • Especially for clients who have to take Required Minimum Distributions (RMDs) and/or want to stay under IRMAA limits for Medicare premium purposes.
    • Having all of your investment/retirement assets in one place greatly helps this process.

     Roth Conversions

• • What is a Roth conversion and why would I do one?
    • A Roth conversion is where you have pre-tax accounts that you elect to turn into after-tax accounts.  The benefit here is the money grows tax-free during your lifetime and up to 10 years after death.
    • You pay tax on the value of your account at the conversion and at the tax rate you are in that year
    • This is a “take a step back to help myself in the future” approach.
    • We are ALWAYS on the lookout for these in major market corrections
    • The market has done quite well over the past few years and there haven’t been many opportunities presented here.
    • The BIG thing to know is you really need cash/liquid assets outside of your pre-tax accounts to cover the tax due for the conversion.
    • Keep an eye out for future correspondence from us on this topic.

     Future Tax Rates

• • Are you preparing for potential changes to the federal tax code in 2026 when the current rates are set to expire?
    • This is a BIG jump ball right now.
    • We have to really see what plays out with the new Trump administration and what policies they can pass through Congress.
    • Republicans hold a very very slim margin here in the house and senate.
    • More to come here.

Estate Planning

 

     Plan Review

• • Is your estate plan up to date and aligned with your current wishes, financial situation, and family structure?
    • Estate planning is a very morbid topic that most people avoid.  It’s depressing.
    • We like to think of it more as what do you want out of life while you are living and what do you want to happen to your assets when you are not here.
      • Again, there is no “one size fits all” approach that works here
      • Your plan should be based on YOUR unique wishes
    • If this is a topic in your plan that you want to tackle, we are here to help and happy to be involved.

     Document Accessibility

• • Do your loved ones know where to find your estate planning documents, such as wills, trusts, and powers of attorney?
    • We strongly encourage our clients to have their important legal documents uploaded to our client portal.
    • Our client services team can assist you with getting this taken care of.
      • We are happy to overserve you.  😊

      Legacy Planning

• • What do you want to happen with your wealth?
    • Do you plan to spend most of it during your lifetime?
    • Would you like to live comfortably and leave a modest amount for loved ones?
    • Is your goal to maximize the amount passed to heirs during your lifetime or after?

      Estate Tax Considerations

• • Are you planning for potential estate tax liabilities if your estate grows significantly over the next few decades?
    • This is another “jump ball” given that current estate tax exemption limits expire after 2025 (pending a law change)
    • This is something we are laser focused on.
    • This is a topic that will impact many of our clients over the next 20 to 30 plus years.

      Gifting

• • Are you utilizing annual gift exclusions to transfer wealth to family members tax-free?
    • First of all, how does this work?
      • As financial and tax professionals, we get this question over and over and over.  Of course, we are happy to answer these.
      • What happens here is there is an annual exemption of $19,000 from one person to another
        • That means that a married couple could gift $19,000 x 4 = $76,000 to their married son and daughter in law.
        • That means that a married couple could gift $19.000 x 2 = $38,000 to their grandchild.
      • Can I gift over this amount or is it illegal?
        • You ABSOLUTELY CAN gift over this amount.
        • The IRS just requires you file an informational gift tax return to report the gift.
      • If I file a gift tax return, do I have to pay taxes on the gift or does the recipient?
        • Just about always the answer is NO.
          • Most people fall under the estate tax exemption, which gift taxes are tied to
          • So, unless you have a very substantial estate, the answer is just about always no.
      • If you are planning on gifting over these dollar amounts and have questions, feel free to reach out.  We’re happy to help here.

How We Can Help

 

• We’re ultimately here to help you as you pursue your financial goals and objectives in life. We are very proud of the business we have built on these principles.
• If you’re ready to dive deeper into these topics, schedule a review meeting with our team by calling (732) 556-4200 or emailing team@oujowealth.com.
• If you are interested in becoming a wealth management client or if you know someone that this could help, feel free to send it to them!

Please contact our office if you’d like to set up a review meeting to discuss your financial plan.