If I Could Only Teach Two Financial Lessons

What if you could focus on just two key lessons to build and protect your wealth? Rory O’Hara, CFP®, CRPC™, founder of Ausperity Private Wealth, shares decades of financial expertise in this quick and insightful video.

  1. Pay yourself first.
  2. Prevent taxes from eroding your wealth.

These simple yet transformative lessons can make a significant impact on your financial journey.


Video Transcript

Two Core Lessons for Wealth Management 

Every day at Ausperity Private Wealth, we consult clients on many different retirement strategies. But if I could narrow down wealth management to just two core lessons, they would be to pay yourself first and understand how to prevent taxes from eroding your wealth.

Why Paying Yourself First is the Key to Building Wealth

My advice to pay yourself first isn’t just a simple rule. It’s a fundamental philosophy I recommend to all my clients for building wealth. I think of it as a philosophy because paying yourself first means you prioritize saving and investing before you shell out money on discretionary spending. By considering savings and investments as necessary expenses, you can make consistent contributions towards your financial objectives.

Creating a Proactive Approach to Saving

All it takes is a proactive, disciplined approach. Start by determining how much of your income you want to allocate towards saving and investing. This percentage you come up with should include your goals, such as retirement savings, a large purchase or a down payment on a first home, maybe even a specific vacation.

Automate Savings for Long-Term Success

Then, set up automatic transfers from your checking account to your savings or your investments on payday. That’s it. Just remember to regularly review and adjust your percentages as your priorities change.

Minimize Tax Erosion with Strategic Wealth Management

The second wealth management tip is understanding how to mitigate your tax burdens. It’s true that taxes can significantly erode your wealth over time, reducing your potential for growth and the rewards of compound interest. Things like capital gains taxes, income taxes, and estate taxes all contribute to wealth erosion.

Strategies to Lower Your Tax Burden

But the good news is there are ways to mitigate this tax impact.

  • Utilize tax-incentivized accounts such as 401(k)s and Roth IRAs.
  • Consider Roth conversions and health savings accounts.
  • Leverage charitable contributions, estate planning, and strategic tax-loss harvesting.

Keep More of Your Wealth for a Prosperous Future

These strategies can all lower your tax obligations. The goal is for you to keep more of your hard-earned money and give less of it to Uncle Sam, putting it to work for a prosperous financial future.

Why Partner with Ausperity Private Wealth

With over 40 years of experience, our young and dynamic team at Ausperity Private Wealth has proven to be invaluable partners to our clients. Visit our website at ausperityprivatewealth.com to book an appointment to discuss not only these tips but others to help you unlock the true potential of your wealth.

Navigating The Tax And Investment Considerations Of Inheriting An IRA

Rory O’Hara

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Forbes Finance Council

COUNCIL POST| Membership (fee-based)

Rory O’Hara, CFP®, CRPC®, is the founder and senior managing partner at Ausperity Private Wealth.

Many adults will, at one point, inherit an IRA. Most, however, lack a basic understanding of the rules and potential tax ramifications associated with assuming control of such an account. That’s hardly a surprise.

For one, the topic is steeped in minutia, involving complexities that even many financial advisors fail to understand fully. Another issue is that it’s linked with death, which is an unpleasant reality of life, often causing some to keep anything related to it at arm’s length. (This also explains why many people don’t have a will or an estate plan.)

Overall, everyone needs to understand the potential consequences if an inherited IRA gets liquidated too quickly (taxes!), along with the fallout if it doesn’t happen soon enough (penalties!). But there are some other intricacies to keep in mind, too. Here is what to look for and how to avoid potential pitfalls with inherited IRAs.

Traditional Versus Roth IRAs

Most people appreciate that traditional and Roth IRAs are taxed differently. But as a reminder, the latter consists of after-tax assets, which can accumulate in value and are not taxable upon withdrawal. Meanwhile, the former gets funded with pre-tax dollars. Those also accumulate in value but come with a variety of tax obligations.

These rules generally apply to inherited IRAs as well. For non-spousal beneficiaries, it’s pretty simple if you inherit a Roth: You have 10 years from the original owner’s death to liquidate the account. There are no required minimum distributions (RMDs), and, again, that money is tax-free.

However, if you inherit a traditional IRA, things are more nuanced. The key question is whether the account owner was taking RMDs.

If so, you also must take RMDs (based on your life expectancy) and liquidate the account within a 10-year window. If the original owner of the traditional IRA was not taking RMDs when they died, you don’t have to take them either—but the 10-year rule still applies.

(Note: Spousal beneficiaries can roll an inherited traditional IRA into their own preexisting traditional IRA, thus potentially delaying RMDs. Also, it’s possible to roll an inherited Roth IRA into their own preexisting Roth IRA, which would allow them to avoid the 10-year rule.)

Investment Decisions

The disparate tax treatment outlined above may also color how heirs invest within their inherited accounts. In general, a Roth IRA offers the opportunity to be more creative, while a traditional IRA calls for some caution.

For example, let’s say an heir who is relatively young and financially secure inherits a Roth IRA from a parent. They could add some growth-oriented holdings, allow the entire balance to accrue for 10 years and then withdraw everything tax-free.

On the other hand, since traditional IRA withdrawals are taxable, a more conservative, balanced approach typically makes more sense. Moreover, it’s probably a good idea for most heirs to draw down the balance annually (even if they aren’t subject to RMDs). Otherwise, they could be on the hook for an outsized tax hit at the end of the mandatory 10-year liquidation period.

Generational Planning

IRA owners don’t have to give IRA assets to their heirs directly. Notably, many high-net-worth investors make a trust the beneficiary, an avenue that provides them with greater control over how the assets are managed—which can give them peace of mind.

Via a trust, it’s possible to impose limits on when and how proceeds from an account get distributed (hopefully in a tax-efficient manner). In some instances, this approach will give heirs time to develop the patience, knowledge and humility to handle a sudden influx of cash responsibly.

Even without a trust, heirs can benefit from adopting a trust-like mindset—viewing the inherited funds as a long-term resource rather than a prize they can spend profligately. This perspective can help avoid mistakes stemming from poor tax planning or impulsive financial decisions.

Indeed, most financial advisors will tell you that people are far more cautious with the money they have earned and saved than a windfall they’ve inherited. It’s partly why generational wealth can be hard to preserve.

Professional Guidance

When it comes to inherited IRAs, one size rarely fits all. Professional financial advice is invaluable given the assorted number of tax rules, timelines and investment strategies. Working with a knowledgeable advisor helps ensure you make decisions tailored to your specific needs and goals—preserving and growing the wealth entrusted to you.

The bottom line? Don’t go at it alone. The right guidance can make all the difference in turning inherited assets into a meaningful legacy.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Stay Ahead: Prepare Your Financial Plan for 2025 Now

With the new year comes renewed commitments to improving your finances, strengthening your savings, and planning for the future. At Ausperity Private Wealth, LLC, we believe that even though the ball has already dropped, it’s not too late to jump-start your financial plan for 2025. Watch this quick video to review each area of your financial plan and make sure you’re starting the new year off on the right financial foot.


Video Transcript

The Perfect Time to Commit

The new year is a perfect time to commit to improving your finances and planning for your future. Even though the ball has already dropped, it’s not too late to jump start your financial plan for 2025.

Meet Shane Fox

Hi, I’m Shane Fox, founder at Ausperity Private Wealth. IIn this video, I’ll share how to review your financial plan and start the year off on the right foot.

Maximize Your Retirement Savings

For retirement, maximize your retirement savings by contributing to plans like 401Ks, 403Bs, or IRAs. For 2025, you can contribute up to $23,500 to employer plans, which will reduce your taxable income.

Traditional IRAs

Traditional IRAs are another option to lower your AGI, provided your income is within certain limits. Contributions there grow tax-deferred, and while withdrawals in retirement are taxed, they can reduce your current year tax liability.

Requirement of Minimum Distributions (RMDs)

Don’t forget about Requirement of Minimum Distributions, otherwise known as RMDs. Under the Secure Act 2.0, the RMD age has changed again, so please consult an advisor to determine whether you need to begin distributions at 70.5, 72, 73, or 75.

Emergency Fund

For cash flow, ensure your emergency fund covers three to six months of essential expenses, including mortgages, utilities, and groceries. If you don’t have enough saved, create a plan to build this over the next year.

Budgeting for Success

Additionally, budgeting is a simple yet effective way to track expenses, save consistently, and then give yourself permission to spend within your means.

Health Savings Accounts (HSAs)

For risk management, if you’re enrolled at a high-deductible health plan, consider contributing to a health savings account. Contributions there are tax-deductible, the earnings grow tax-free, and the withdrawals for qualified medical expenses are tax-free as well.

Review Workplace Benefits

Review your workplace benefit plans and update your coverage if necessary, especially if you’ve experienced a major life change like marriage, divorce, or childbirth. Your employer also may incorporate what’s called a flexible spending account in which you can save pre-tax dollars for out-of-pocket expenses.

Charitable Contributions

If you itemize deductions, annual gifts or qualified charities can help reduce your tax liability while giving back to causes you care about.

529 Savings Plans

Consider contributing to a 529 savings plan for a child or grandchild. It’s a great way to help fund their future education.

Roth IRAs

Roth IRAs are also an excellent tool for building tax-free retirement savings. With benefits like no RMDs and tax-free withdrawals after age 59 and a half, there’s simply nothing better.

Diversify Your Investments

Take time to review your portfolio and confirm that it’s properly diversified, especially given market volatility and recent inflation.

ESG and Impact Investments

You might also be considering incorporating ESG or impact investments that align with your values and your goals.

Update Beneficiary Designations

For estate planning, again, if you’ve experienced a major life event in 2024 like the birth of a child or family members passing, remember to update that.

Review Estate Documents

Review your estate planning documents like wills, trust, powers of attorney to ensure they reflect your current wishes.

Annual Gifts

Making annual gifts up to the annual exclusion amount also will help.

We’re Here to Help

At Ausperity, we’re here to help.

Reach Out to Us

If this list feels overwhelming, please reach out to us. With over 10 years of experience, I’m passionate about helping clients improve their financial plans and enjoy their lives and wealth to the fullest. The Ausperity private wealth team has the tools and the knowledge to help get your financial house in order this year.

Please call me at 856-252-0103 or email me at [email protected] to set up a complimentary meeting.

Thanks and have a great day.