Financial Planning

What You Can Learn from the Super Bowl

February 03, 2022

Sometimes a Good Defense is the Best Offense

The L.A. Rams face off against the Cincinnati Bengals in Super Bowl LVI this Sunday, and defensive strategies will play a critical role in determining the winner.

Defensive strategies are also essential for your wealth plan and keeping your ‘home team’ protected. Here are some examples:

Insurance. Insurance is an important part of any wealth plan; you need the right types of coverage in the appropriate amounts to protect your income stream, home, and other assets. For example, many high-net-worth individuals sleep easier under an umbrella policy because it protects them against a significant judgment, such as a personal injury or other serious lawsuit. And owners of high-value items, such as jewelry, art, and collectibles, can protect these assets through a ‘floater’ policy. Life, disability, and long-term care insurance also can prevent depletion of emergency and earmarked assets if an unexpected crisis arises. Life changes will impact your insurance needs, so it’s important to readjust your coverage periodically.

Trusts. Trusts are important tools in most estate plans. A revocable trust (also known as a living trust), for example, is a way to keep your assets out of probate, which can be expensive and time consuming for your heirs, as well as, keeping your estate matters private. Funded irrevocable trusts can remove assets from your taxable estate and protect assets from creditors, even in professional malpractice suits. Irrevocable, special needs, and insurance trusts meet different types of needs. We’ll work with you and your legal advisor to help craft a plan that’s appropriate for your family’s situation.

Retirement Savings Accounts. For 2022, individuals may contribute up to $20,500/$27,000 into a 401(k), and $6,000/$7,000 in an IRA or Roth IRA, (please keep in mind there are IRA income limitations). Assets in a 401(k) or IRA are protected by anti-alienation rules, meaning they are safe from lawsuits or claims or creditors. IRA’s have many different tax implications like when making contributions and taking distributions, so please reach out to discuss your personal situation. If, over the years, you find yourself with multiple IRA’s (such as 401(k) rollovers from previous employers) it’s possible the number of retirement accounts you accumulate can become cumbersome. An IRA rollover is a way to consolidate your assets for a better view and greater control of your overall asset allocation.

Looking to up your game? Your Washington Trust Wealth Advisor would be happy to speak with you about these and other risk management strategies that can help protect you and your loved ones, your wealth, and your goals.

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This material is presented for informational purposes, and nothing herein constitutes legal, accounting, or tax advice. Please consult with an attorney or tax professional regarding your specific financial, legal or tax situation.

The views expressed here are those of Washington Trust Wealth Management and are subject to change based on market and other conditions. Investment recommendations and opinions expressed in these reports may change without prior notice. All material has been obtained from sources believed to be reliable, but its accuracy is not guaranteed.