Tax Strategies For High Net Worth Investors

By Jon Andrew, Financial Advisor at Heights Wealth Management

Tax planning isn’t just something to think about in April—it’s a year-round process. For high-net-worth individuals and families in Peoria Heights, IL, smart tax strategies can make a significant difference in preserving wealth, minimizing tax liability, and enhancing charitable giving opportunities.

At Heights Wealth Management, we help clients navigate strategies for retirement accounts, charitable contributions, and long-term wealth preservation. Below are some key considerations when thinking about tax planning.
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Why Tax Planning Matters Year-Round

Many investors wait until tax season to consider their strategy. However, effective tax planning can help you:

Avoid last-minute surprises
Reduce the impact of required minimum distributions (RMDs)
Protect against higher tax brackets in retirement
Maximize charitable giving strategies

By working with a financial advisor like Jon Andrew in Peoria Heights, you can develop a proactive tax plan aligned with your retirement and estate goals.
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Understanding Pre-Tax Investments

What Are Pre-Tax Accounts?

Traditional IRAs and 401(k)s are examples of pre-tax (or tax-deferred) investments. You contribute pre-tax dollars today, allowing investments to grow tax-deferred until you begin withdrawals.

Required Minimum Distributions (RMDs)

Under the SECURE Act, once you reach age 73, you must begin taking RMDs from IRAs, 401(k)s, and similar retirement plans. Withdrawals are taxed as ordinary income. If you’ve accumulated significant savings, your RMDs alone could push you into a higher tax bracket.
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The Role of After-Tax Investments

Roth IRAs

A Roth IRA is funded with after-tax dollars. The benefit? Qualified withdrawals are tax-free, helping you manage taxable income in retirement.

Should You Have Both?

Having both a Traditional IRA and a Roth IRA can provide flexibility. For instance, you may choose withdrawals strategically to balance taxable and tax-free income in retirement. A large number of High-Net-Worth individuals utilize converting funds from a Traditional IRA or 401K to a Roth IRA to lower their tax burden later in life (such as when RMD's begin, as mentioned above). This can have a compounding impact and drastically lower the taxes paid over their lifetime.
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Charitable Giving Strategies for Tax Efficiency

Charitable contributions can serve as both a philanthropic tool and a tax-planning strategy for high-net-worth investors.

Donating Appreciated Securities

Instead of selling stock and donating the cash, consider gifting appreciated securities that you’ve held for more than a year. Benefits include:

Potential deduction of the stock’s fair market value
Avoiding capital gains tax on the appreciation
Allowing the charity to sell without triggering taxable gains

When Cash Donations Make Sense

If you donate depreciated securities, the deduction is limited to the stock’s current value. In such cases, cash contributions may be more tax-efficient.

IRS Rules to Keep in Mind

For donations of $250 or more, obtain written documentation from the charity.
Review IRS Publication 526 for detailed charitable contribution guidelines.
Always record deductions on Schedule A when filing your 1040.

Why Work With a Local Financial Advisor in Peoria Heights?

Tax rules change frequently, and the right strategy depends on your individual situation. That’s why working with a financial advisor who understands both national tax law and the local Peoria Heights, IL community is so valuable.

At Heights Wealth Management, Jon Andrew helps high-net-worth families and professionals:

Develop strategies for RMDs and Roth conversions
Optimize charitable giving for maximum tax benefit
Coordinate tax planning with estate and retirement goals

Next Steps

Tax planning is complex, but you don’t need to navigate it alone.

If you’re in Peoria Heights, IL or the surrounding area and want to explore personalized tax strategies, connect with Jon Andrew at Heights Wealth Management today.

Schedule a confidential consultation and take the first step toward smarter tax planning: Contact Us