Setting Up Tax-Advantaged Retirement Plans: A Strategic Guide for Long-Term Wealth Preservation

For high-net-worth individuals and business owners, retirement planning is more than a financial milestone—it’s a strategic opportunity to preserve wealth, reduce tax exposure, and ensure long-term financial independence. Tax-advantaged retirement plans can offer a powerful framework to achieve these goals, but selecting and structuring the right plan requires precision, foresight, and expert guidance. IRS Benefits of Setting up a retirement plan

Why Tax-Advantaged Retirement Plans Matter

Tax-advantaged retirement plans allow contributions to grow either tax-deferred or tax-free, depending on the structure. For business owners, these plans can also serve as a tool to attract and retain top talent, reduce current taxable income, and optimize cash flow.

Key Benefits:

• Tax Deductibility: Employer contributions are typically tax-deductible, reducing overall business tax liability. IRS Retirement plans startup costs tax credit

• Tax-Deferred Growth: Investment gains within the plan compound without immediate tax consequences.

• Flexible Contribution Limits: Plans like SEP IRAs and Solo 401(k)s allow for higher contribution ceilings, ideal for high-income earners.

• Estate Planning Integration: Retirement assets can be strategically incorporated into broader estate and legacy planning.

  
  

Common Plan Structures for High-Income Earners

Choosing the right retirement plan depends on income level, business structure, and long-term goals. Below are several options frequently used by affluent individuals and closely held businesses:

Plan Type	Contribution Limit (2025)	Tax Treatment	Ideal For
SEP IRA	Up to $70,000, or 25% of eligible employee compensation	Tax-deferred	Self-employed, small business owners
Solo 401(k)	Up to $81,250 (with catch-up)	Tax-deferred or Roth	Entrepreneurs with no employees
Defined Benefit Plan	Varies (can exceed $100,000)	Tax-deferred	High-income professionals seeking large deductions
Safe Harbor 401(k)	Up to $23,500 + match	Tax-deferred or Roth	Businesses with employees

Note: Contribution limits are subject to IRS updates and eligibility requirements.

SECURE Act 2.0: Expanded Opportunities

Recent legislation has expanded access and flexibility for retirement planning. Under the SECURE Act 2.0:

• Required minimum distribution (RMD) age increased to 73, allowing assets to grow longer.

• Catch-up contributions for individuals aged 50+ are indexed for inflation.

• Small businesses may qualify for tax credits when establishing new retirement plans.

These changes create new planning windows for optimizing retirement contributions and minimizing tax drag.

How Our Firm Can Help

Navigating the complexities of retirement plan selection and compliance requires more than generic advice. Our wealth management team specializes in tailoring retirement strategies that align with your income, business structure, and long-term vision. We provide:

• Plan Design & Selection: Customized recommendations based on your financial profile.

• Tax Coordination: Integration with your CPA or tax advisor to maximize deductions.

• Compliance Oversight: Ensuring your plan meets IRS and DOL requirements.

• Ongoing Monitoring: Adjustments as your business and personal goals evolve.

Next Steps

If you're considering setting up or optimizing a retirement plan, now is the time to act. The right strategy can unlock significant tax savings and position your portfolio for long-term growth. Contact our team to schedule a confidential consultation and explore how a tax-advantaged retirement plan can support your financial future.

Your goals, our strategies. Together, let’s make your goals happen.

Rigden Capital Strategies is a trusted partner for individuals seeking wealth management and financial planning. Our fee-only fiduciary approach ensures that every recommendation is made with our clients' best interests in mind. We develop customized financial plans, combining strategic investment management with proactive tax and retirement planning to help clients achieve their long-term financial goals.

Disclosure: This content is for informational and educational purposes only and should not be interpreted as financial, legal, or tax advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information provided. Investment decisions should be based on individual circumstances, and we recommend consulting a qualified professional before implementing any financial, legal, or tax strategies. Past performance is not indicative of future results, and all investments carry risks, including potential loss of principal. No investment strategy can guarantee success or protect against loss in all market conditions. Investors should carefully consider their risk tolerance, investment objectives, and financial circumstances before making investment decisions.

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