By Brandy Branstetter, CFP®
Your 40s tend to be a significant milestone, financially speaking. Though you and your partner may be earning a significant income and have established your basic financial foundation, it’s time to upgrade and maximize the opportunities that can help you meet both the short-term and long-term objectives you’ve set for yourself and your family.
In our practice, our client discussions often revolve around the complex and competing objectives of meeting today’s expenses while still working toward achieving future dreams.
In other words: How do you balance today’s financial responsibilities with tomorrow’s goals and objectives?
Here, we’d like to illustrate what this means at this stage of your life through a fictional case study:
Meet Chandler and Monica
Chandler and Monica are a married couple in their mid-40s with 14-year-old twins, Erica and Jack. Chandler is a well-paid advertising executive at a high-profile marketing firm in Kansas City. Monica is a professional chef and owns an upscale downtown restaurant and catering business.
Their combined incomes are roughly $360,000, and with two children nearing college age and as Monica’s business grows, their finances have become more complex. Their objectives include seeking ways to increase their wealth through tax efficiency and where to invest excess cash flow, addressing future college expenses, and using innovative, integrated strategies to make the most of their incomes.
Shift Focus to Advanced Financial Strategies
With their high incomes, Chandler and Monica need to be careful about tax efficiency, both with their investments and their cash flow. They’ve determined they could meet current living expenses mostly on Chandler’s salary and bonuses and can use Monica’s more varied income to invest and build their wealth. A wise move would be to work with their wealth advisor and tax professional to explore advanced strategies, such as:
- Chandler should make sure he’s maximizing his 401(k) contributions and that his matching contributions go toward the Roth component of his 401(k) account to grow tax-free savings. Monica may be ready to explore having a low-cost 401(k) plan at her expanding business to allow her to both defer income from taxes and help retain key employees.
- They should examine their living expenses and work with their tax advisor to determine what expenses could be legitimately deductible through Monica’s business. As examples, since Monica visits catering-client locations, could she lease her vehicle through the business or deduct expenses such as cellular, accounting, and legal services to maximize tax savings?
- Monica and Chandler might establish a real estate LLC, and through it purchase the building where her business is located for tax advantages, additional cash flow, and to diversify their investment holdings, as well as other real estate opportunities that arise.
College Considerations
With teenage twins and their income level, paying for college may require some more strategic planning. They want both twins to attend private colleges, and the four-year cost could jump to $320,000 each at 4% growth in 8 years. Their adjusted gross income (AGI) could disqualify them from need-based financial aid, even from private colleges. Their annual family contribution requirement may be between $53,000 – $70,000 per child in current dollars, so they should work with their wealth advisor and explore advanced college planning techniques. These could include:
- Utilize a superfunding technique to contribute either annually or up to five years’ worth of allowable contributions in a single year to their 529 education savings accounts. Chandler and Monica could contribute up to $38,000 per year to each twin’s 529 account in 2025, or using the five-year allowance, front-load contributions up to $190,000 in one year, not including what their parents could gift as well.
- Since need-based financial aid considerations may not be practical for the family, there may be little aid-related downside to the twins having income (i.e., student income is heavily assessed in the aid-eligibility criteria). Legitimately employing the twins in Monica’s LLC business could allow for “income-shifting” from Chandler/Monica’s higher tax bracket to the twins’ lower bracket. Net income that passes through the lower tax filter could be used for college expenses in the future. For now, income earned by the twins could be contributed to a Roth IRA for each of them.
- As the twins reach college age, Monica may explore implementing a Section 127 tuition-reimbursement program at her business that offers tax advantages to the business and (with the twins as employees) their family as well in the future.
Other Strategic Ideas
As they continue to accumulate investment savings and wealth, they should consider building up their “Future Opportunity Fund.” This is an investment account that provides flexibility in how the money might be utilized. Examples might include the expansion of Monica’s business, purchasing an investment property, or another opportunity to build upon and diversify what they’ve already accumulated. To minimize taxable income in this account, they should utilize annual tax-loss harvesting to offset capital gains and lower taxable income each year.
Health savings accounts (HSAs) offer triple tax advantages they could use to save in a tax-efficient manner. HSAs offer tax-deductibility, tax-deferred growth, and tax-free withdrawals for qualified medical expenses.
Chandler and Monica might also start thinking about their “work-optional years” and what that means for them. This may involve looking ahead to succession planning for Monica’s business, what type of lifestyle they want once their twins are launched on their own, and what attaining that goal would require.
Although this case study is fictional, the scenarios presented reflect the real needs of many of our clients who seek tailored financial strategies to pursue their ideal future with clarity and confidence. By working with an experienced wealth manager and financial planner, you can feel confident you’re making steady, measurable progress toward your own objectives. The strategies highlighted here are just a starting point; our team can help you identify the right approach to building wealth and realizing the lifestyle you envision.
Partner With Us to Guide You Toward Financial Freedom
At Beyond Wealth, we focus on the most efficient strategies to help you achieve your objectives and life aspirations. Our independent advisory firm offers an array of services—focused on our clients—to help pursue a confident financial future.
As fiduciary advisors, our goal is aligned with yours: Connect your wealth to your life’s objectives and empower you to choose and follow the financial road that feels right for you and your family.
Are you ready to take charge of your financial future? Give us a call (913) 871-7980 or email brandy@beyond-wealth.com to schedule an introductory meeting and start this year on a better financial path toward your own vision.
About Brandy
Brandy Branstetter, CFP® is Principal & Wealth Advisor at Beyond Wealth, a fiduciary financial advisory firm based in Overland Park, Kansas. Beyond Wealth is dedicated to empowering clients to make confident and meaningful financial decisions. Specializing in helping mid-career professionals and business owners navigate their work-optional lifestyle, the firm provides personalized comprehensive wealth management services to the Kansas City metro area and beyond.
Brandy’s approach is collaborative and values-driven, helping clients pursue financial independence while aligning their plans with their unique goals and aspirations. She began her financial career in 2005 and became an advisor in 2012. Throughout her journey, she noticed a disconnect in how many firms communicated with female clients, inspiring her to establish a practice focused on genuinely engaging and supporting women in their financial journeys. In 2012, she co-founded Beyond Wealth with a mission to provide clients—especially female professionals and entrepreneurs—the guidance needed to navigate their financial complexities. Together with her business partner, Andrew, Brandy developed the “Good, Better, Best” financial planning framework to deliver tailored strategies that help clients achieve meaningful progress towards their financial aspirations.
Brandy earned a BSBA in Finance from the University of Tulsa and holds the CERTIFIED FINANCIAL PLANNER® designation. Outside of work, she enjoys spending time with her husband, Jon, and their two children, Alexa and Ethan. In their downtime, they love golfing, exploring new vacation spots, and attending live events—everything from rock concerts to Broadway musicals. A dedicated sports enthusiast, Brandy especially enjoys watching Oklahoma Sooner football and cheering on the Kansas City Chiefs. With a lifelong dream of living by the beach, she’s always planning her family’s next big adventure. To learn more about Brandy, connect with her on LinkedIn.
