Phase 2: Grow Your Wealth

The next step on the Roadmap to Success is to actively grow your wealth to build long lasting financial stability.

In this next phase, our focus shifts to accelerating your financial progress by diversifying your investment strategy, maximizing tax-advantaged savings, and strategically reducing any remaining debt. With our strategic approach, we will ensure you are setup for long-term growth while keeping your financial goals in clear view.

The Grow Your Wealth phase is where your financial discipline truly starts to pay off. As you boost your retirement savings, expand your investment portfolio, and manage debt, you’ll see real momentum in your financial journey. This phase is all about putting your money to work and getting you setup up for long-term financial stability and next the phase of reaching financial freedom.

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Financial Planning Activities to Expect 

📈 Maximizing Employer Contributions

The first step in accelerating your investment growth is to take full advantage of your employer-sponsored retirement plan, such as a 401(k).

Maxing out contributions up to IRS limits ensures you’re building your retirement nest egg as efficiently as possible. This not only gives you tax benefits but also puts you on the path to meeting your long-term retirement goals.

Your advisor will help you determine how to balance retirement savings with other financial priorities.

Learn more:

Why you should be maxing out your 401(k)
Tax-efficient investing

📊 Diversified Investing

A diversified investment portfolio is another key to long-term financial growth. During this phase, you’ll focus on growing your portfolio by making regular contributions that align with your risk tolerance and financial goals.

In addition to employer-sponsored plans, you will open and start contributing to additional investment accounts such as an IRA, brokerage, or High-Yield Savings Account (HYSA).

Setting up automatic contributions to these accounts, ideally contributing at least four times a year, helps you stay consistent and disciplined in your wealth-building efforts. A mix of pre and post tax advantaged accounts plays a crucial role in supplementing your retirement savings and growing your overall financial assets.

Your advisor will guide you in maintaining a diversified mix of investments to ensure you’re positioned to capitalize on market opportunities while managing risk effectively.

Learn more:

Investment Strategies Explained
Advantages of Professional Portfolio Management
About Altruist - Our preferred custodian

🎓 529 Educational Fund 

For clients with educational expenses in mind, opening and contributing to a 529 plan for future education costs is a smart move.

This tax-advantaged savings plan allows you to grow money for education expenses, whether for your children or other beneficiaries, with significant tax benefits along the way.

Your advisor will help you decide how much to allocate to your 529 plan(s) based on your overall goals.

💸 Managing Debt

Keeping debt under control remains important in this phase. Event though you are seeing growth in your wealth, you still need to stay focused on maintaining a healthy savings rate (at least 20%) and having a health cash flow.  Racking up a bunch of high-interest credit card debt will eat away at the progress you have made.

If you have remaining debt, such as a mortgage or student loans, the goal is to ensure it’s at a manageable level with low-interest rates.

🏥 HSA Contributions

If you’re enrolled in a High-Deductible Health Plan (HDHP), continuing contributions to your Health Savings Account (HSA) is another critical component of this phase.

HSAs provide triple tax advantages, and regular contributions ensure you’re covered for healthcare costs both now and in the future. It can also serve as an additional investment vehicle for long-term planning.

📝 Estate Planning - Coming in 2025

It’s essential to ensure that your estate plan is in place and stays up to date. This includes reviewing wills, trusts, and beneficiary designations to make sure they reflect your current wishes. Proper estate planning protects your wealth and ensures your legacy is passed on according to your intentions.

⭐ Goal Setting for the Future

As you grow your wealth, it’s important to periodically reassess your financial goals to ensure they align with your evolving needs and circumstances. This often involves:

Reevaluating retirement age and lifestyle goals: As your financial situation changes, you may want to adjust your target retirement age or refine the type of retirement lifestyle you envision.
Modifying medium- and long-term goals: Financial goals, like saving for a second home or travel, may shift over time. We’ll help you update your plan to ensure your goals remain realistic and achievable.

 

 

➡️ Next Step - Phase 3: Financial Freedom

Additional Resources

• Investment Strategies Explained
• Advantages of Professional Portfolio Management
• About Altruist - Our preferred custodian
• Why you should be maxing out your 401(k)
• Tax-efficient investing