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Family Investment Options: Securing Your Family’s Financial Future

Posted by Jim Kantowski, CFP®, CPA on July 13, 2020

Family Investment Options: Securing Your Family’s Financial Future

Choosing to secure your family’s future by creating a financial plan that includes all aspects of your life and family, to build and preserve your wealth, is one of the most important decisions you’ll ever make. There’s no one-size-fits-all approach to family investment and your wealth accumulation plan—the strategy you choose should be based on your individual and family needs. A family investment portfolio and plan can include various types of financial products and strategies, and developing your portfolio is a highly personal process.

It’s important to consider both your short- and long-term goals, as well as your specific family situation, as you work to secure and maximize your wealth. In this article, we’ll walk through a few common components of a family investment portfolio, as well as their benefits for you and those dearest to you.

How Family Investment Can Benefit Your Loved Ones

It’s important to create a financial plan that works for your family. To accomplish this, you need to understand the benefits of different investment options, which vary depending on your personal circumstances. It’s also important to be clear on your financial goals.

For example, many people pursue family investment to help fund their children’s education, support a child with a disability, create a financial legacy, pass a family business onto adult children, or reduce taxes. (Tweet this!) Or, you may have elderly parents and want to ensure they receive the best care possible in their golden years.

Keep major milestones in mind—such as retirement—as you reexamine your personal financial objectives, as well as any plans you may have to pass wealth onto future generations. Your actions today can have a positive impact on your family for years to come.

Securing Your Family’s Future

It’s essential to ensure that your family will be protected in the event of a tragedy. So for couples in situations where one partner contributes most of the family’s income, having life and disability insurance is a wise family investment choice. It’s also often overlooked, with 40% of insured Americans reporting they wish they’d bought life insurance sooner.

A family investment management professional can help you choose the right amount of life or disability insurance for peace of mind, and work with a third party to ensure you purchase the right products.

Ensuring Care For Children With Disabilities, Or A Parent

If you need to ensure that a child with a disability receives care into their adult years, a family investment portfolio can help you secure and build assets that will support your dependents and their quality of life in the future.

Setting up a special needs trust is one way to ensure your adult child will be cared for in your absence. This type of trust enables a child with a disability or chronic illness to collect income while maintaining eligibility for public assistance programs. It’s crucial to appoint a trustee, such as a family member who has a relationship with your child, to manage the funds.

Having a plan in place for an aging parent can also be valuable. Ensuring that they have enough assets to provide for their care through a long-term care policy is important. You can reduce the emotional stress that sometimes comes along with having an aging parent if you don’t have to worry about the financial aspect.

Creating A Legacy Of Wealth

If you have substantial income from your pension and Social Security benefits, you may not need to dip into your investments during retirement. Having the freedom to invest more aggressively and allocate more money to stocks than bonds may enable you to build greater wealth to pass on to your children and future generations.

You should also explore family investment options such as Roth IRAs, IRAs, 401(k)s and other accounts with tax advantages to ensure you pay the least amount of taxes possible. These types of investment retirement accounts can be set up with a strategy geared toward your children, enabling them to avoid or minimize paying income tax on the funds in the account when they make withdrawals.

In addition, there are other strategies for maximizing wealth passed down in your family, such as gifting, funding education or 529 accounts for children, managing capital gains and distributing/using your family investment portfolio in a strategic and tax efficient way.

Distributing Assets With Ease

In the event of a death, asset distribution can become a stressful process, especially if a family business is involved. Creating an estate plan—a set of instructions for who will inherit your possessions when you pass away—as part of your family investment portfolio can help remove an unnecessary burden on your loved ones. Estate planning also helps ensure that your charitable objectives and other wishes are fulfilled.

Do you need help planning your family’s next chapter?

With the right support, the financial planning process can be extremely rewarding. Working with a family investment management expert you can trust makes the process smoother and offers peace of mind that your finances are being managed properly.

At Bay Point Wealth, we take a comprehensive approach to your family investment portfolio by assessing your overall family situation and financial history, as well as considering your goals to help you make the best decisions possible for the future.

Our team also has strong tax expertise, and we’ll help you find savings to increase your wealth and the funds that you pass on to future generations. In addition, as a fee-only firm, we don’t take commissions. We’re passionate about keeping our clients’ best interests at the forefront of our business.

Schedule a call today to get started on your family’s financial road map.

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Topics: Investment News