Those working at Dow Incorporated may want to consider how the longer you have been employed, the more complex your financial planning needs become. While you may share the same goals as other co-workers, like planning for retirement after leaving Dow Incorporated, or contributing to your children’s education, the elements that go into achieving your specific goals require careful management.  

This guide will walk you through the best Dow Incorporated financial planning strategies. It starts with taking a holistic view of your situation and can be greatly simplified by finding the right experts to guide you.

Given your employment at Dow Incorporated, your life likely has a lot of moving parts. This makes comprehensive financial planning all the more important. Comprehensive financial planning looks at your entire financial picture. It includes investment management through strategic asset allocation and diversification, tax planning, retirement planning before and after leaving Dow Incorporated.  Such as estate planning, risk and insurances, cash flow, college funding, executive compensation and gifting strategies for family and/or charities.

Within investment management, taking a strategic asset allocation approach is key. Through strategic asset allocation, you use your financial goals and situation to determine an appropriate split between stocks, bonds and other asset classes. You then diversify as much as possible within these categories. For example, you might set a strategic allocation of 60% stocks and 40% bonds, then within the stock band you’d have 60% U.S. large-cap stocks, 20% U.S. small and mid-cap stocks and 20% foreign stocks.

As the market shifts and the value of your investments changes, your asset allocation may shift. After a bull market, for instance, when stocks tend to outperform, your stock portion may grow to account for 70% of your portfolio rather than 60%. When this happens, you should rebalance back to your original target allocation by selling some of your stocks and using the proceeds to buy more bonds until you’re back to the 60% to 40% split you intended. Your strategic allocation should only change if your personal situation changes, some examples would be if you are nearing retirement from Dow Incorporated, or have a major life event. What you don’t want to do is get duped into changing your allocation because of market events. It can be tempting to let your stocks continue to grow during a bull market, but doing so would increase your overall portfolio risk and could leave you overexposed when the market declines.

In addition to your strategic asset allocation, another important financial planning consideration for high net worth individuals is how to manage taxes. The higher your income and net worth, the bigger burden taxes become. To help minimize taxes on your investments, think strategically about not just the types of investments you hold but also where you hold them. For instance, you might keep income-producing investments like bonds or bond funds inside a tax-sheltered account like an individual retirement account (IRA). Another way to help minimize taxes is through gifting to a charity or loved ones. The IRS allows individuals to deduct up to 100% of qualifying charitable contributions, which are those made in cash to a qualifying charity, and to give up to $15,000 per person per year without incurring any gift taxes yourself. As an added bonus, any assets you gift to your beneficiaries today will help reduce the future estate taxes they may owe.

Retirement is most investors’ biggest financial goal. While some may think retirement planning should be simpler for high-net-worth individuals – you have more assets to fund your retirement, after all – this is far from the case. Retirement planning is equally if not more complex for high-net-worth individuals. The first step of retirement planning is determining how much income you’ll need in retirement after leaving Dow Incorporated. A good place to start is with your current monthly expenses. Create a list of your expenses, labeling them as either essential or discretionary, essential being things like utilities and groceries and discretionary expenses being the ones you could do without, such as restaurant meals and travel.

As you review your spending, think about how you want to spend your time in retirement. This will help you determine how your expenses may change when you retire from Dow Incorporated. Perhaps you’ll spend less money on transportation when you don’t have to commute to and from work every day, but more money on travel working through your retirement bucket list. Be as detailed and thorough as possible as you forecast your expenses. It’s okay if you aren’t certain what you’ll spend; as your retirement plans solidify, you can revise your estimate. Once you know how much you want to spend in retirement, you can create a plan for how you’ll generate that income. Your retirement income could come from a variety of sources like your investments, including retirement and non-retirement savings, Social Security, real estate, or a business.

Similar to how you categorized your expenses as essential versus discretionary, you should create two categories of retirement income sources: fixed and variable. Fixed sources of income are those with a preset amount that you know will come on a regular schedule, such as Social Security, a pension or an annuity. Variable income is derived from sources that may fluctuate in value, such as your investments. Ideally, all of your essential expenses in retirement after leaving Dow Incorporated will be covered by fixed income sources. This will provide you with the greatest level of flexibility in your retirement spending. If the stock market declines, you can cut back on your discretionary expenses without needing to scrimp in those essential living areas.

The other key to maximizing your retirement income is managing your taxes in retirement. Retirement accounts are a powerful tool in this regard. There are two types of retirement accounts: traditional, or pre-tax, accounts and Roth, or after-tax, accounts. Traditional accounts allow you to take a tax deduction today for any contributions you make. You then pay no taxes on the money until you withdraw it from the account. With Roth accounts, you don’t get a tax deduction on contributions today, but you can withdraw the money tax-free after retiring from Dow Incorporated.

The limiting factor of Roths is that the IRS doesn’t allow high-income earners to contribute. Individuals and heads of households earning over $144,000 in 2022 cannot contribute to Roth IRAs and those earning $129,000 or more can only make reduced contributions. For married couples filing jointly, the income phase-out range in 2022 begins at $204,000, with couples earning over $214,000 no longer able to contribute. Saving for retirement in both traditional and Roth vehicles, to the extent that you are able, will make it easier for you to manage taxes in retirement after leaving Dow Incorporated. Since Roth assets aren’t taxed when withdrawn, you’ll be able to leverage those for tax-free income in retirement.

If you aren’t able to contribute to a Roth now, you can also talk to a financial advisor about making Roth conversions during lower income years when you can afford to pay a little more taxes in exchange for more future tax-free income. As you can see, financial planning for high-net-worth individuals doesn’t end the day you retire from Dow Incorporated. Chances are you want to share the wealth you’ve accumulated over the years with your loved ones, which is where estate planning comes in.

As complex as retirement planning is, estate planning for high-net-worth individuals can be even more complex. The goal of estate planning is to ensure as much of your inheritance goes where you want it to go. One of the best tools for this is trust. There are a wide variety of trusts and customization options available, so choosing the right one and making sure it’s set up properly can be an involved process. For the best results, work with a financial professional and an attorney who can help you choose the right type of trust and draft an appropriate trust agreement. Additionally, making sure that you have your assets and income adequately protected with suitable insurance is critical. This could include making sure that you have appropriate health, homeowners, automobile, boats, and other vehicles and excess liability coverages. Also, how about either long-term care or life insurance; might those fit your situation?

Financial planning for Dow Incorporated employee is a complex process involving many moving parts. This is why many investors choose to work with a financial advisor – but not just any financial advisor will do. For the best and most comprehensive financial planning guidance, you should partner with someone who understands Dow Incorporated company benefits.  The Retirement Group advisors are trained to help Dow Incorporated employees develop a comprehensive financial plan to achieve your financial goals. The Retirement Group holds our advisors to strict ethical and educational requirements and mandates that they put their clients’ needs first. Our financial advisors will never recommend an investment unless he or she is confident it is the best option for you.

When choosing a financial advisor, it’s important to consider how he or she is compensated. Advisors can receive compensation in three ways: through commissions on the investments or products they sell; through an annual, hourly, or flat fee (called fee-only advisors); or through a combination of fees and commissions (called fee-based advisors). Under a fee-only model, the advisor does not earn any commissions so there is no incentive to promote one product over another. Instead of commissions, which can be variable and obscure, retainer-based fee models ask clients to pay a single, preset fee. This fee is determined based on your wealth management objectives and the scope of the services the advisor provides, ensuring you get the high level of personalized service and attention that you need. With a fee tied directly to your needs and goals, you can rest assured that your advisor has your best interest in mind at all times.

The Retirement Group is a nation-wide group of financial advisors who work together as a team.

We focus entirely on retirement planning and the design of retirement portfolios for transitioning corporate employees from Dow Incorporated. Each representative of the group has been hand selected by The Retirement Group in select cities of the United States. Each advisor was selected based on their pension expertise, experience in financial planning, and portfolio construction knowledge.

TRG takes a teamwork approach in providing the best possible solutions for our clients’ concerns. The Team has a conservative investment philosophy and diversifies client portfolios with laddered bonds, CDs, mutual funds, ETFs, Annuities, Stocks and other investments to help achieve their goals. The team addresses Retirement, Pension, Tax, Asset Allocation, Estate, and Elder Care issues. This document utilizes various research tools and techniques. A variety of assumptions and judgmental elements are inevitably inherent in any attempt to estimate future results and, consequently, such results should be viewed as tentative estimations. Changes in the law, investment climate, interest rates, and personal circumstances will have profound effects on both the accuracy of our estimations and the suitability of our recommendations. The need for ongoing sensitivity to change and for constant re-examination and alteration of the plan is thus apparent.

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