6 Basics Of High Net Worth Retirement Planning

Written By: William Rivers
Reviewed By: William Rivers
Published: October 5, 2022
Last updated: December 8, 2023

As a High Networth Individual (HNWI) heading toward your retirement, it's critical to have a working financial plan that will allow you to enjoy your retirement while still getting passive income. The Securities and Exchange Commission (SEC) categorizes a person with a net worth of $1.5 million in assets, stocks, cash, bonds, fund shares, or over $750,000 investable assets as a high net worth individual.

The advantage of being an HNWI is that financial organizations can offer you a loan facility even after retirement. You also have unlimited access to tailored investment accounts and investment advisors. This article will explore tips you can use while planning your retirement as an HNWI.

1. Maximize Your Retirement Accounts

Being a high-net-worth individual with a good income, you should take advantage of employer-sponsored retirement plans and Individual Retirement Accounts (IRA). These plans ensure your investment income grows tax-free.

2. Evaluate Your Savings Target

It is essential to realize that now that you are no longer fully employed, you will not be getting regular paychecks. It is why you need to calculate how much you need to set aside to fund your lifestyle and upkeep. How much you put aside for these expenses will vary from one person to the next, depending on your income streams, lifestyle, your place of residence, and fixed monthly expenditure.

After considering the above, keep in mind your life expectancy as well. The Social Security Administration has a practical life expectancy calculator that you can use to calculate. It may be a sensitive factor to consider, but it helps you estimate your exact saving goal.

3. Make Provisions For Long-Term Care and Medical Emergencies

Vivante Living comments that apart from your regular expenditure, making plans for long-term health care is also vital for your retirement. Have active health saving accounts to cover these costs tax-efficiently. Health savings accounts (HSA) are only available to people that qualify for high-deduction health schemes. Still, they cover medical expenses and work as a retirement investment avenue. It is because you can always buy stocks, mutual funds, and other assets using your HSA balance with no tax obligations on the same. As opposed to flexible savings plans, you can carry over HSA balances yearly with no time lapse.   

4. Put Testamentary Trusts In Place

A testamentary trust defines how your estate will be shared among your beneficiaries. It takes more than a will to distribute your wealth as a high net worth person. You may need a trust to protect your assets from creditors, minimize tax liabilities and put stringent measures on how the wealth will be passed to the beneficiaries in case of your demise. A trust also protects your loved ones from going through the probate process where their inheritance requires court validation before they can be declared official beneficiaries. The probate process takes a while and is very costly to the extent it can eat up a good part of your estate income. There are different trusts, including a bypass trust that allows a married couple to avoid estate tax by sharing their assets into two trusts.  

As a grantor, you must choose a trustee for your estate. If you opt for a revocable trust, you can still be the trustee, but if you settle for an irrevocable trust, you will need to name your trustee. It helps to seek the help of a financial advisor or an estate planning attorney because putting a trust in place is much more complicated than writing a will.

5. Minimize Tax Obligations

You can reduce your tax liabilities, including holding onto your 401(k) withdrawals, changing your IRA account to a Roth IRA account, or even relocating to a tax-friendlier state. Roth IRAs are exempted from required minimum distributions and give you a chance to save something substantial.

For high-net-worth individuals residing in high-tax-prone areas, you can consider relocating to states like Florida, South Dakota, Alaska, and Georgia that do not tax retirement income or have minimal deductions.

6. Combine Your Assets With A Single Financial Advisor

The belief is that running different accounts with different financial organizations and advisors helps minimize risk and diversify your investment. The truth, however, is that portfolio diversification results from your means of investing and not who you invest with. It is expensive to run different accounts. Consolidating your assets will help you streamline your asset management and reduce running costs. So, consider doing so.


Planning for your retirement as a high-net-worth individual can be challenging. You may need to consider talking to a financial advisor to take you through the process. You should also make provisions for eventualities like increased taxation in the future and inflation. Take your time planning but start planning early. 

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William Rivers is an editor with a master’s degree in Human Services Counseling at Maine State University. He has more than 20 years of experience working in the senior healthcare industry.
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