Alterra Advisors

Investment & Tax Planning for the Future

Tax Investment

Two existing traditional IRAs were converted to Roth IRAs. This would also allow Roths IRAs to be funded annually through conversions even though their income exceeds the limit to make direct contributions. These would form an important leg of their tax-free retirement bucket.

We also evaluated several practice retirement plan options and landed on a Safe Harbor 401k Profit Sharing plan. The Safe Harbor structure allows them to maximize their savings regardless of the contribution level of their employees. The profit sharing plan allows for additional elective contributions each year if more savings is needed or tax deduction would be significant.

Saving for a New House

With many of their tax shelters maximized, we started systematic monthly savings to a tax efficient brokerage account. Though this would be allocated for long term growth like their retirement accounts, this would serve a unique role in their plan as the first place they would draw in case of more medium-term need and wanted to preserve their rainy-day funds.

Because these funds would generate taxable income, we focused additional attention on investment tools that could be managed for tax efficiency.