Factors for Making a Financial Plan

As a business manager with ML Management Partners based in New York, Benjamin Leitman manages the financial affairs of celebrities in sports and entertainment as well as those of high net worth families. One of the services Benjamin Leitman handles for his clients is developing financial plans for the management of their assets.

Some of the basic factors that go into creating a financial plan are a client’s age, financial aims, lifestyle and risk tolerance. All of these need to be examined beforehand to provide the client with useful and adaptable tools. To begin with, age is a significant consideration as it affects the steps and financial investment products put into the plan. A younger-generation client may be able to allow for high-risk investments as there is time to recover losses. In contrast, older clients are more likely to benefit from conservative investments as they are closer to retirement age and larger losses may have a more severe impact. The financial plan being drawn up should also have actionable strategies tailored to the client’s specific goals.

While the objective of a financial plan is primarily to manage one’s wealth responsibly, it is just as important for it to not restrict their present lifestyle. Such a situation may be a disincentive to maintain the strategies. That is why a good financial plan accounts for ways to maintain one’s lifestyle, as long as the spending does not exceed one’s revenue. Finally, risk tolerance determines the investment products a financial plan should have. The higher the risk a client allows, the greater the volatile investment products their strategy can include.

Saving More for Retirement Can Help You Reduce Your Taxes

New York-based finance professional Benjamin Leitman draws on a decade of experience in the financial services industry to help high-net-worth clients and sports and entertainment people manage their wealth. As a part of his job as a business manager at ML Management Partners, Benjamin Leitman provides his clients with advice on how to manage their taxes.

One way of reducing annual taxes is to save more for retirement. By choosing a type of retirement account that allows you to defer paying income tax on retirement savings, you can reduce your tax bill. Different accounts have different limits on how much you can save each year without paying taxes.

If you have an individual retirement account (IRA), you can make tax-deferred savings of up to $6,000 as of 2020. Income tax on this money will only be paid when it’s withdrawn from the account. With an employer-sponsored plan like the 401(k), the maximum pre-tax contribution in 2020 is of $19,500. People over 50 can also make catch-up contributions which are currently set at an extra $1,000 for an IRA and 6,500 for a 401(k). Spouses even have the option of saving double the tax if they each have an IRA. Even if one of the spouses doesn’t work, the other can still save money in the other’s IRA account with the same maximum limit of $6,000.

By maximizing retirement savings, you have the double advantage of paying fewer taxes each year while at the same time ensuring you will have more money for when you retire.

Overview of Financial Planning

Benjamin Leitman earned a bachelor of science in finance and entrepreneurship from Syracuse University in New York. He serves as business manager at ML Management Partners, a New York-based business management firm offering financial solutions to high net worth individuals and clients in the sports and entertainment industries. Benjamin Leitman provides clients various financial services, including investment management and financial planning.

Financial planning is the process of estimating a company or individual’s financial situation, capital requirements, and long-term monetary goals. This practice aims to define corporate finance goals and establish financial blueprint and policies for future activities. Financial plans typically outline business strategies and long-term investment decisions concerning the procurement and administration of a business funds.

The process usually begins with determining capital requirements by estimating the cost of assets and promotional expenses, whether short-term or long-term. Insight into the capital requirements enables the financial planner to identify funding sources and estimate the time for securing funds. The structure through which a company acquires its funding is also outlined in the financial plan and includes decisions on long-term and short-term debt-equity rato. 

Balancing Savings and Growth

Part of the ML Management Partners team in New York, Benjamin Leitman works with high net worth clients in Sports and Entertainment to develop optimal tax and insurance strategies. Benjamin Leitman emphasizes financial planning approaches that take into consideration capital markets and the economy, and also reflect individual timelines and objectives.

With uncertainty a prevailing trend in 2020, Americans have responded by saving more and keeping more cash at hand. The personal savings rate, which had hovered at 7 percent for several years, rose to a high of 33 percent in April before settling into the teens. For some people, this has meant shoring up their emergency fund; for others, it has involved allocating money between short-term and long-term savings accounts.

Short-term goals include saving for down payments on big-ticket items such as homes, to take advantage of historically low-interest rates, as well as vehicles. At the same time, many are looking toward savings accounts with the potential to grow, such as education accounts and retirement vehicles like IRAs and 401(k)s. The tax-advantaged nature of these vehicles helps mitigate volatility, while still encouraging long-term returns designed to keep pace with inflation.

For those who find money to be tight at present, one viable strategy involves creating a plan that increases savings over time. For example, a family may decide to increase their contribution to 401(k) plans by a certain amount each year, until the maximum allowed contribution is met. This type of approach flexibly defines a growth orientation, while ensuring that sufficient cash is at hand to meet immediate needs.