@TKopelman This is a fun strategy to educate clients about. After all the years of buying company stock in their 401k.
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Nicole Milone
242 posts
Net Unrealized Appreciation (NUA) is a strategy most people have never heard of
If you have company stock inside a 401(k)…
There's a way to distribute it and pay long-term capital gains rates instead of ordinary income
On large amounts, the savings can be massive
This is a strategy very few know about
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@TKopelman It's a fluid situation that needs attention especially the more assets the client owns outside investments in the market. Understanding the entire tax situation throughout the year drives this planning.
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I see people make $500k-millions in equity comp a good year and pay almost no attention to the taxes
RSU vesting can push you into a higher bracket and under withholding issues can happen all the time
ESPP sales create ordinary income
Option exercises can trigger AMT
This isn't a set it and forget it situation
There's real money at stake where the right planning is crucial
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Advisors have a hundreds of neat wall st tricks to manage wealth
BUT, consistently, here’s what clients ACTUALLY end up liking about their advisors:
(it’s not what you think)
1) Wiring money / moving large money - it sounds silly, but ppl get VERY nervous wiring $. We help fund almost-every home purchase and we access funds <24-hrs. We’re like private bankers for deal makers.
2) Inconsistent Cash partner - our clients make large, choppy amount of cash/RSUs. So we regularly have the “what should we do with this $” convo. It’s boring + grounding convo we have ALL the time.
3) Having someone to talk to - this is big. Wealthy ppl are on an island. Parents/friends start looking at you funny. You’re a little uncomfortable. New skin. Advisors don’t judge, and you can tell them anything.
4) talk you out of dumb stuff - your new-rich friends will constantly try to get you into their friend’s new deal/hot fund. You think “this is what rich people do,” so you invest. This goes on until you die. Advisors help ground the convo, and talk you out of deals that don’t move your life forward, or would stress you out.
5) make sure your family gets your wealth if you die - sounds simple, but it keeps people up at night. You want to not screw up your kids, you want your spouse to live stress-free, and you want everyone to be on the same page. Hiring an advisor is like buying Insurance on your estate plan. It will get done.
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These topics are wild, bc I can’t sell those on a website. People call us bc they “tax issues” or “my options expire in 90-days” or ask “how do I diversify out of startup equity without paying too much tax?”
But in reality, it’s all those intangibles that people REALLY hire for (and never give up)
It’s a luxury that not all families can have. A true partner and resource.
But the ones that have it, will never give it up.
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I see this mistake all the time with wealthy individuals
They finally start making real money
So they buy a second home
Here's what actually happens:
- They spend millions on a place they visit 3-4x a year
- Property taxes. HOA. Maintenance. Insurance.
- That's often $50k/year just to own it + the mortgage
- Meanwhile they could rent an incredible house in that same location for $10k-$15k a week.
- $40k in rentals = 3-4 amazing trips with zero headaches.
- No property management. No surprise repairs.
- No capital tied up.
- No guilt to go back to the same place and not do other trips
The math usually favors renting the experience over owning the asset
Unless you're going 6-8 weeks+ a year
I always advise people to try this and rent the first couple years and make sure they love it and it is worth it
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Solo Business owners or those paid 1099 can put up to $72,000 into a Solo 401(k) in a year
Most don't know that
Which is why so many are using SEP IRAs:
- Solo's allow for an added $24,500 employee contribution that SEPs do not
- Solos allow mega backdoor
- Solos do not make backdoor Roth IRA taxable
- Solos offer catch up contributions
Solo for the win
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Nicole Milone retweetledi
Most people think financial planning is about picking investments
It's not
It's about making sure your money is doing the right things, in the right accounts, at the right time
And that you are progressing towards the goals you have
Investments are maybe 20% of the plan
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People often judge financial advisors by one thing:
“Did you beat the S&P 500?”
But that's not how real financial planning works
A good financial advisor is not just picking investments
They help you:
- Organize your entire financial life
- Understand your cash flow
- Make tax decisions
- Think through equity comp
- Evaluate business opportunities
- Stay accountable
- Make big decisions faster
In today's new episode, I walk through exactly what it looks like to work with a financial planner step by step:
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@TKopelman It is so great that you share all of this with the world. This is the fun part of our job
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My favorite tax planning moves that most high income DIYers are missing:
1. S Corp
- reducing self employment tax
- utilizing PTET
- maxing out QBID
2. Solo 401k
- maxing this out pretax at $70k
- needing less wages or profit than SEP IRA due to employee side
- less QBID reduction since employee side
- employing spouse and adding them
- mega backdoor Roth ability
3. PTET
- paying state taxes through the beginners which is huge for high tax people in high tax states
4. QBID optimization
- 20% of wages or 50% of profits, whichever is less. Needs to be maximized yearly
5. C Corp
- so impactful for my QSBS eligible businesses. Can now get $15mil excluded and expand that 2-5x through trusts
6. Cash balance plan
- Great way to defer even more per year and then roll to an IRA and convert to Roth in early retirement
7. 401k profit share
- allows you to add more to 401ks
- less employees you have and more wages to yourself, makes it the best
8. Roth conversions
- defer at top brackets, convert through low
- allows you to lower your effective lifetime tax rate
9. Backdoor Roth IRA and mega backdoor Roth 401k
- can max all pretax accounts first then stack tax free dollars above that
10. R&D credits
- can offset a lot of tax for the dollars put into research
11. Maximizing charitable giving
- DAFs
- CRTS
- all about lumping giving into your highest earning years and donating before a sale to avoid the capital gains tax too
12. Owning the real estate your business operates in
- allows you to take those losses and use them to offset business income based on how much of the building your business uses
- can use cost seg to accelerate losses and use that to offset income in your highest tax years
13. 529
- can superfund and cover college when young and avoid all the capital gains taxes
These are all things we proactively help our clients on
You need a team doing this type of planning for you
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I cannot tell you how often I see this exact situation
One spouse is a very high income earner
The other earns significantly less
And because of that smaller paycheck, the lower earning spouse is not fully taking advantage of some of the most powerful planning opportunities available to them
They are not maxing out their 401(k)
They are not contributing to their Mega Backdoor Roth 401(k)
They are not using an HSA
They ignore their ESPP
They skip the backdoor Roth IRA
This is a mistake
When you are married and your finances are joint, even partially, you cannot look at these decisions in isolation
You want to use all the planning tools you have available
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“What happens to my equity comp if I leave my job?”
Whether you have RSUs, ISOs, or NSOs, you need to have a plan
You don't want to leave money on the table
Here's what you need to know:
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Nicole Milone retweetledi
This couldn’t be more true
We compete with Goldman, JP Morgan, etc for our clients
And many left those firms to work with us because they wouldn’t do any real, I depth planning
And don’t even think about touching tax planning
Financial Advisor Recruiter@AdvisorJobs
It used to be that a big name brand was almost a necessity in this industry. Especially if you worked with ultra high net worth families. The logo mattered. The tower mattered. The balance sheet mattered. For a long time, credibility was borrowed from the institution. Over the last 20 years, that has changed dramatically. Technology leveled infrastructure. Custodians leveled access. Independent RIAs matured. Clients became more educated. Today, many ultra high net worth families are choosing small and mid sized boutique firms. Not despite their size. Because of it. They want direct access to decision makers. They want fewer layers. They want alignment. They want advice, not product distribution. The playing field is not perfectly level. But it is far more open than it used to be.
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@TKopelman Yes. Time is valuable, always looking for ways to get more time. If I can hire a professional to make sure it's right and save me time. I'm in!
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The most successful people I know have no problem spending money to make sure things are done well
The hire the best professional around them to take things off their plate and free up their time
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Nicole Milone retweetledi
RETWEET this. Every day. Until Election Day.
Anyone anywhere in America who tells you Donald Trump will be better for the economy needs this tweeted at them IMMEDIATELY.
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Nicole Milone retweetledi
Quite the reminder of where we were on J6 and the hellscape in which we now find ourselves.
Roger Parloff@rparloff
The evening Trump was impeached for inciting insurrection, but before the Senate vote on whether to convict him, he vowed that those who "engaged in the attacks last week will be brought to justice." That is, those he now calls "hostages" & "political prisoners" & vows to pardon.
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Nicole Milone retweetledi
This jackass running for Governor in North Carolina, Mark Robinson, thinks children dying in school shootings are a laughing matter.
This is grotesque and disqualifying.
You CAN’T let him win, North Carolina.
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Nicole Milone retweetledi
When you've hugged as many heartbroken parents as I have, quitting isn't an option.
No, gun violence isn't a "fact of life." It's a result of too many politicians like JD Vance who answer to their corporate gun lobby donors instead of everyday Americans.
Headquarters@HQNewsNow
JD Vance responds to the deadly shooting in Georgia by saying school shootings are just “a fact of life” and attacking common sense gun safety reform
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@TKopelman Keep it real. We really can succeed and still prioritize rest and relaxation... (Whatever that looks like for you)
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I hate the garbage posts about "you either can use your weekends to watch tv & hang out or you can build your dream life"
Like come on
The only reason I am out here building a successful business is because I rest & recover correctly
Avoiding burnout is crucial to your success
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Nicole Milone retweetledi
Holy hell this ad from @VoteVets absolutely eviscerates Trump.
Share this everywhere.
Because NOBODY in our armed forces should EVER have to salute that man again.
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