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Harsco Insights Navigating the Buy Borrow Die Wealth Strategy

'Harsco 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.

'Harsco 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:

How the ultra-wealthy accumulate and grow their wealth tax-efficiently through strategies like the 'Buy, Borrow, Die' method.
The role of leveraging assets for borrowing and how this reduces taxable events while enabling substantial spending.
Implications for Harsco employees and how they can apply similar financial strategies to potentially improve their retirement planning.

Against the current financial landscape, Harsco 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 Harsco Employees Approaching Retirement.

Experienced Harsco 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 Harsco employees approaching retirement, the same tax-efficient wealth transfer strategy that utilizes assets may also apply to financial planning tools. For example, the Harsco 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.

Articles you may find interesting:

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.

How does the Harsco Pension Scheme ensure that investment strategies align with the financial goals of its members, and what measures are in place to assess the adequacy of these strategies over time? Given the complexities involved in managing a pension scheme, understanding the decision-making processes and the criteria for evaluating fund performance is crucial for members to make informed retirement choices.

Investment Strategy Alignment: The Harsco Pension Scheme ensures that its investment strategies align with members' financial goals by regularly reviewing its Statement of Investment Principles (SIP) and adjusting strategies based on quarterly performance monitoring. The Trustees use tools such as LCP Visualise to track investment returns and funding levels, ensuring the Scheme is on track for full funding by 2025. This review process helps guarantee that the investment strategies are adequately meeting long-term goals and adapting to market conditions(Harsco Pension Scheme_3…).

In what ways does the Harsco Pension Scheme engage with its investment managers to ensure transparency and stewardship in voting on significant shareholder resolutions? Exploring how Harsco collaborates with these managers can shed light on the efficacy of decision-making and the importance of governance in the scheme's investment practices.

Engagement with Investment Managers: The Harsco Pension Scheme engages closely with its investment managers, delegating stewardship activities like voting on shareholder resolutions. These managers, such as BlackRock, follow rigorous voting and engagement policies, which are reviewed regularly. The Trustees ensure transparency by monitoring managers’ ESG integration and voting behaviors and by addressing significant issues, such as modern slavery or climate risks(Harsco Pension Scheme_3…).

What are the specific retirement benefits available to employees under the Harsco Pension Scheme, and how can members customize their retirement strategies to fit their individual needs? This question addresses the diversity of retirement options and the potential for tailoring plans to meet unique financial situations.

Retirement Benefits Customization: The Harsco Pension Scheme offers a range of retirement options, including default and self-select investment options that reflect member demographics and retirement preferences. Members can customize their retirement strategies through diversified funds, ensuring their investments are aligned with individual needs. The default strategy has been reviewed to ensure appropriateness for the majority, with options for drawdown, lump-sum withdrawals, or annuity purchases(Harsco Pension Scheme_3…).

How does the Harsco Pension Scheme handle the changing demographics of its membership, especially in terms of investment risk and available retirement options? Understanding how the scheme adapts to demographic trends can help employees anticipate changes that may affect their retirement savings and strategies.

Adapting to Demographic Changes: The Trustees monitor demographic trends and adapt the Scheme’s investment strategies accordingly. For example, as the Scheme matures, the investment allocation moves towards lower-risk assets to reflect the changing membership profile. Regular reviews ensure the Scheme adapts to the evolving needs of its members, helping to reduce risk while maintaining adequate returns(Harsco Pension Scheme_3…).

What is the process for Harsco employees to access their pension statements, and how frequently are these updates provided to ensure that members stay informed about their retirement savings progress? Regular communication about contributions and growth can significantly impact an employee's comfort level when planning for retirement.

Pension Statement Access: Harsco employees can access their pension statements through regular updates provided by the Trustees, typically on a quarterly basis. These statements, including detailed reports of contributions, investment growth, and progress toward retirement goals, help members stay informed and make adjustments as necessary(Harsco Pension Scheme_3…).

How does Harsco incorporate Environmental, Social, and Governance (ESG) considerations into its investment philosophy, and what impact do these principles have on the pension schemeâ€™s performance? A deeper examination into these aspects may enhance employee understanding of socially responsible investing trends within their pension fund.

ESG Considerations: The Harsco Pension Scheme integrates Environmental, Social, and Governance (ESG) principles into its investment strategy, regularly assessing its managers’ ESG practices. These assessments include human rights, climate change, and CEO pay ratios, ensuring that investments are socially responsible and aligned with long-term sustainability goals(Harsco Pension Scheme_3…).

What are the implications of the current IRS limits on contributions to retirement plans for employees participating in the Harsco Pension Scheme in 2024? Recognizing how these financial regulations impact personal contributions and matching funds can empower employees to maximize their retirement funding strategies.

IRS Limits Impact: The current IRS limits on contributions to retirement plans, such as those applicable in 2024, directly impact Harsco employees by capping how much they can contribute tax-free. Understanding these limits helps employees plan their contributions to maximize employer matching and ensure they take full advantage of their retirement benefits(Harsco Pension Scheme_3…).

With regards to the ongoing performance evaluations, what benchmarks does the Harsco Pension Scheme utilize to measure the success of its investments, and how are these benchmarks selected? This insight can help employees understand the performance metrics that drive the long-term viability of their pension scheme.

Benchmarking Investments: The Harsco Pension Scheme uses various benchmarks to assess the performance of its investments. These benchmarks are selected based on expected risk and return profiles and are reviewed quarterly. Monitoring against these benchmarks ensures that the Scheme’s strategies remain aligned with long-term funding goals and adapt to changing market conditions(Harsco Pension Scheme_3…).

How can Harsco employees obtain more information on the specific investment options available within the pension scheme, including the associated risks and potential returns? Access to comprehensive investment literature is essential for employees to make well-informed decisions regarding their pension scheme participation.

Investment Options and Information: Harsco employees can obtain detailed information about their pension’s investment options, including the associated risks and potential returns, through regular reports from the Trustees and investment consultants. This transparency allows employees to make informed decisions about their pension participation(Harsco Pension Scheme_3…).

What is the preferred method for employees to contact Harsco to gain further clarification on their questions about the pension scheme, and what resources are available for them during the retirement process? Clear communication channels and support mechanisms are vital as employees navigate their retirement preparations. These questions are designed to provoke thought and discussion around the operations, benefits, and governance of the Harsco Pension Scheme while providing employees with a foundation for understanding their retirement options.

Communication Channels: Employees can contact the Trustees of the Harsco Pension Scheme for clarification on pension-related questions through established communication channels. Resources, including personalized financial advice and regular meetings with investment managers, are available to assist employees during the retirement planning process(Harsco Pension Scheme_3…).