'ChampionX employees nearing retirement can benefit from understanding wealth-building strategies, such as the 'Buy, Borrow, Die' method, to enhance their financial planning, leveraging tax-efficient wealth transfer tools like in-service withdrawals to optimize their retirement strategies.' – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement Group.
'ChampionX employees nearing retirement should explore advanced wealth management strategies like the 'Buy, Borrow, Die' approach to maximize their assets and leverage tax-efficient tools, ensuring their retirement planning aligns with long-term financial goals.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group.
In this article, we will discuss:
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How the ultra-wealthy accumulate and grow their wealth tax-efficiently through strategies like the 'Buy, Borrow, Die' method.
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The role of leveraging assets for borrowing and how this reduces taxable events while enabling substantial spending.
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Implications for ChampionX employees and how they can apply similar financial strategies to potentially improve their retirement planning.
Against the current financial landscape, ChampionX employees can learn from the strategies of the wealthiest Americans - buy, borrow, die. This creates wealth accumulation, big spending, and a tax-efficient transfer of large assets to future generations. Unlike ordinary employees who are taxed on earnings as they are made, the ultra-wealthy build most of their wealth through the appreciation of their assets - which is usually untaxed until the assets are sold.
How Wealth Grows Among the Ultra-Wealthy.
Start with asset acquisition. And the ultra-wealthy - unlike most who earn via salaries - build wealth by buying appreciated assets. It's a strategy Warren Buffett and Elon Musk have used - paying themselves little or no salary while building their fortunes by owning stock in their companies. Together the wealthiest 1% of Americans have nearly US $23 trillion in assets - an example of how rich wealth can be with smart asset management.
Now leverage those assets for loans - big spending with low taxable events - etc. Ainsi, Larry Ellison and Elon Musk have pledged their stock holdings to fund lifestyles including properties and yachts worth millions of dollars. While this is more common for the super-rich, by 2022, more than USD 1 trillion had been borrowed by the broader wealthy class.
The Effects of the 'Buy, Borrow, Die' Strategy on Estate Planning.
The final step is when the asset holder dies. The stepped-up basis tax provision means heirs can inherit assets at death without paying taxes on the appreciation that occurred during the asset holder's lifetime, which helps with outstanding debts, including any prior loans. Despite a potential 40% estate tax on large inheritances, legal strategies and trusts can ease tax burdens.
What That Means for ChampionX Employees Approaching Retirement.
Experienced ChampionX pros may find these wealth management principles useful in planning for retirement or making investment decisions. This strategy identifies key differences in tax treatment across income groups which reinforces the debate over possible reforms.
For ChampionX employees approaching retirement, the same tax-efficient wealth transfer strategy that utilizes assets may also apply to financial planning tools. For example, the ChampionX 401(k) plan allows in-service withdrawals for employees 59 1/2 and older, allows access to funds before retirement, and allows for flexible planning.
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- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
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Sources:
1. Lowrey, Annie. 'Buy, Borrow, Die.'
The Atlantic
, 17 Mar. 2025, pp. 1-3.
Explores how the ultra-wealthy use this strategy to minimize taxes, offering retirees insights into wealth preservation.
2. Mitchell, Tazra. 'How Wealthy Households Use a 'Buy, Borrow, Die' Strategy to Avoid Taxes.'
DC Fiscal Policy Institute
, 29 Apr. 2024, pp. 2-4.
Highlights tax advantages of the strategy, showing retirees how to manage wealth and defer taxes.
3. Hirshman, Susan. 'Leveraging Your Assets to Manage Your Wealth.'
Charles Schwab
, 20 Mar. 2023, pp. 3-5.
Discusses borrowing against assets for liquidity without triggering taxes, helping retirees manage finances.
4. 'The Buy, Borrow, Die Tax Strategy Explained.'
Physicians Thrive
, 15 Sept. 2023, pp. 4-6.
Explains how retirees can use this strategy to avoid capital gains taxes and transfer wealth.
5. 'Tax-Aware Borrowing.'
J.P. Morgan
, 10 Oct. 2023, pp. 5-7.
Outlines tax-aware borrowing strategies that can reduce taxes and increase cash flow for retirees.
What type of retirement savings plan does ChampionX offer to its employees?
ChampionX offers a 401(k) retirement savings plan to its employees.
Does ChampionX provide matching contributions to the 401(k) plan?
Yes, ChampionX provides matching contributions to the 401(k) plan to help employees save for retirement.
What is the eligibility requirement for ChampionX employees to participate in the 401(k) plan?
Most ChampionX employees are eligible to participate in the 401(k) plan after completing a specified period of employment.
Can ChampionX employees choose how much to contribute to their 401(k) plan?
Yes, ChampionX employees can choose to contribute a percentage of their salary to their 401(k) plan, within IRS limits.
Are there investment options available in the ChampionX 401(k) plan?
Yes, ChampionX offers a variety of investment options within the 401(k) plan for employees to choose from.
How often can ChampionX employees change their 401(k) contribution amounts?
ChampionX employees can change their 401(k) contribution amounts at designated times throughout the year.
Is there a vesting schedule for ChampionX’s matching contributions?
Yes, ChampionX has a vesting schedule for matching contributions, which determines when employees fully own those contributions.
Can ChampionX employees take loans against their 401(k) savings?
Yes, ChampionX allows employees to take loans against their 401(k) savings under certain conditions.
What happens to the 401(k) plan if a ChampionX employee leaves the company?
If a ChampionX employee leaves the company, they have several options for their 401(k) savings, including rolling it over to another plan or withdrawing the funds.
Does ChampionX offer financial education resources for employees regarding their 401(k) plan?
Yes, ChampionX offers financial education resources to help employees understand and manage their 401(k) plan effectively.