California CPA July 2024 | Page 17

What CPAs Do : Retirement Financial Planning Activities Tax planning can become more straightforward after your client retires and many retirees may move to another practitioner due to a lower level of sophistication or may even prepare their own returns due to the simplicity . While you may already be suggesting contributions to IRA , 401 ( k ), profit-sharing and defined benefit plan / cash balance plan , enhancing service to your clients at this stage by integrating a planning specialization and revenue generated through a multi-faceted relationship is key .

What CPAs Can Add Gain additional insight into retirement areas such as 401 ( k ), profit-sharing and cash balance plans to benefit your executives and business owner clients . The benefits to your client could include significant tax deductions , the ability to help them reduce turnover and helping them design custom plans to fit their corporate culture .

The enhanced outcomes for clients include things like the elimination of state income tax ; the potential elimination of Social Security and Medicare tax ; the accumulation of significant assets in a Roth that is beneficial to heirs ; and tax deductions for shareholder / member / partner contributions to retirement plans .

What CPAs Do : Investment Planning Activities CPAs routinely suggest contributions to various plans , including IRA , Simplified Employee Pension plan , 401 ( k ) and SIMPLE-IRA , as well as work with clients regarding the timing of sales due to tax law changes and may counsel on 1031 exchanges with sales of property and Opportunity Zone credits .

What CPAs Can Add Even if you don ’ t have plans to manage money professionally , adding some basic knowledge will help your clients ask the right questions and enhance investment planning activities related to their financial planning experience .

Conclusion Offering financial planning services to clients improves relationships and outcomes . When clients understand how your advice is tailored to their best interests , it is easier to implement the strategies you know are in their best interest . A deeper understanding of how to benefit their companies and families is just a few steps away .

Leonard Wright , CPA / PFS , AIF ®, CFP ®, CGMA , CLU ®, ChFC ® is a wealth management advisor and a member of the CalCPA Personal Financial Planning Committee . You can reach him at leonard . wright @ nm . com .

CalCPA leaders — too many to mention here — have dedicated themselves for decades to CPAs nationally when it comes to personal financial planning . So much so that financial planning started being tested on the CPA Exam in January .

Interesting in Becoming a PFS ? Visit https :// us . aicpa . org / membership / join / pathway-pfscredential to find out more .

More info on retirement planning and ERISA can be found in other articles by this author :

California CPA magazine Retirement Ready : Financially Prepare Diverse & Low-income Communities https :// a-us . storyblok . com / f / 1015104 / x / daff91593d / 0622-california-cpa . pdf

Retroactive ERISA Plans https :// a-us . storyblok . com / f / 1015104 / x / 2864b108b5 / 0621-california-cpa . pdf

Rethinking 65 Retirement-Plan Tax Incentives for Business-Owner Clients https :// rethinking65 . com / 2022 / 06 / 30 / retirement-plan-tax-incentives-for-businessowner-clients /

Six Steps to Transforming Retirement Plans https :// rethinking65 . com / 2022 / 03 / 30 / six-stepsto-transforming-retirement-plans /

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