Clients regularly ask for financial planning guidance in the context of wealth planning and especially during equity rescue strategy sessions.

One recurring issue is selection of the best funding vehicle when saving for emergency funds, retirement, and college education for the children, and wealth transfer upon death.

When planning for clients, it is important to address each goal separately, as each carries with it various risks and rewards. Implementing each goal will present the question as to what type of vehicle to choose: tax deferred, tax favored or tax neutral.

One risk is market risk. If you lose 20 percent of your mutual fund account due to market volatility, it requires you to become more risk accepting to achieve the 25 percent rate of return to get your money back.

For example, you have $100 and put it in equities, and they lose 20 percent, so that you now have $80. In order to get back to $100, you will need to obtain a return of 25 percent to get you back to your starting point.

It is better to not lose the money in the first place and set up a less risky investment strategy that has stop-loss protection in addition to offering upside market gains. You can achieve both goals.

Another risk is taxes. Although Wall Street expects your tax-deferred contributions to retirement accounts, these could be the worst funding vehicles to maximize wealth. For example, contributions to your employer 401(k), especially in excess of their company match, could be a horrible strategy.

Overfunding your IRA without proper stop-loss protection can be a recipe for a depleted retirement account when you are beyond working age.

Many clients are better served by seeking instead tax-favored, not tax-deferred, vehicles.

These retirement vehicles can be structured to be very asset-protected. Paying a little more now in tax can offer a great opportunity for future tax-free distributions.

As a tax attorney, I have often encouraged a smaller current tax bill instead of a larger one later. It is worthy to consider whether the IRS and Wall Street truly have your best interests at heart when they repeat the mantra of tax-deferred environments.

Following the herd can sometimes get you in trouble.

Instead of tax-neutral bonds, which often provide paltry returns, families with young children or grandparents have an incredible opportunity to make contributions to tax-favored environments. These asset-protected strategies provide the opportunity for healthy returns with downside protection.

Security (and protection against loss) can be achieved without having to worry about poor investment news or outliving your retirement funds. It is never too late to adjust your strategy.

“Equity rescue planning” is a growing niche. Whether the equity is within your house, business, earnings, cash flow or savings, clients must be willing to look beyond traditional strategies and seek their goals from a more holistic approach.

There are many safe options with good returns.

Douglas S. Delaney, J.D., LL.M is a local tax and estate planning attorney in Bluffton. www.delaneylawfirmplansahead.com

Clients regularly ask for financial planning guidance in the context of wealth planning and especially during equity rescue strategy sessions.

One recurring issue is selection of the best funding vehicle when saving for emergency funds, retirement, and college education for the children, and wealth transfer upon death.

When planning for clients, it is important to address each goal separately, as each carries with it various risks and rewards. Implementing each goal will present the question as to what type of vehicle to choose: tax deferred, tax favored or tax neutral.

One risk is market risk. If you lose 20 percent of your mutual fund account due to market volatility, it requires you to become more risk accepting to achieve the 25 percent rate of return to get your money back.

For example, you have $100 and put it in equities, and they lose 20 percent, so that you now have $80. In order to get back to $100, you will need to obtain a return of 25 percent to get you back to your starting point.

It is better to not lose the money in the first place and set up a less risky investment strategy that has stop-loss protection in addition to offering upside market gains. You can achieve both goals.

Another risk is taxes. Although Wall Street expects your tax-deferred contributions to retirement accounts, these could be the worst funding vehicles to maximize wealth. For example, contributions to your employer 401(k), especially in excess of their company match, could be a horrible strategy.

Overfunding your IRA without proper stop-loss protection can be a recipe for a depleted retirement account when you are beyond working age.

Many clients are better served by seeking instead tax-favored, not tax-deferred, vehicles.

These retirement vehicles can be structured to be very asset-protected. Paying a little more now in tax can offer a great opportunity for future tax-free distributions.

As a tax attorney, I have often encouraged a smaller current tax bill instead of a larger one later. It is worthy to consider whether the IRS and Wall Street truly have your best interests at heart when they repeat the mantra of tax-deferred environments.

Following the herd can sometimes get you in trouble.

Instead of tax-neutral bonds, which often provide paltry returns, families with young children or grandparents have an incredible opportunity to make contributions to tax-favored environments. These asset-protected strategies provide the opportunity for healthy returns with downside protection.

Security (and protection against loss) can be achieved without having to worry about poor investment news or outliving your retirement funds. It is never too late to adjust your strategy.

“Equity rescue planning” is a growing niche. Whether the equity is within your house, business, earnings, cash flow or savings, clients must be willing to look beyond traditional strategies and seek their goals from a more holistic approach.

There are many safe options with good returns.

Douglas S. Delaney, J.D., LL.M is a local tax and estate planning attorney in Bluffton. www.delaneylawfirmplansahead.com