Welcome to the third edition of The Fiduciary Guide, our monthly newsletter from Kinetic Wealth.
Our goal is simple: to share a little of what’s happening in our world, pass along planning insights that matter, and highlight ideas and resources we think are worth your time. We hope this becomes a useful and enjoyable touchpoint each month.
“No one tells you running is 10 percent cardio and 90 percent negotiating with the voice begging you to quit.”
– David Dack
THE FIDUCIARY BRIEF
Your Tax Return Is Filed - Now the Real Planning Begins
For most of us, filing a tax return feels like the finish line we’ve been hoping for in the first months of each year. We gather documents, submit forms, and breathe a sigh of relief. But for those focused on proactively living a life of financial stewardship, the weeks after tax season are actually some of the most valuable planning opportunities of the year.
Why Post-Filing Is Prime Planning Season
Your tax return is a detailed financial snapshot of the past year, not just a required and complex compliance document. It reveals your income sources, investment activity, retirement contributions, deductions taken, and tax liabilities. For us as your fiduciary financial planner, it's one of the most powerful tools we have to help you avoid overpaying taxes over your lifetime.
Through reviewing returns together with many of you, we’ve identified:
- Bracket headroom: Are you leaving room in a lower bracket that could be used for Roth conversions or strategic income acceleration?
- Missed deductions or credits: Could adjustments to your giving strategy, business expenses, or retirement contributions improve your outcome next year?
- Capital gains exposure: Are there opportunities to harvest losses or rebalance in a tax-efficient way?
- RMD planning: For those approaching or in retirement, are distributions being timed in a way that minimizes your tax burden?
The earlier in the year we identify these opportunities, the more time we have to act on them (and the better we believe your lifetime tax outcome will be).
Why Sharing Your Tax Return Matters
We ask clients to share their tax return with us each year as they are comfortable. Without it, we're working from estimates and guesses which can sometimes paint an incomplete picture. With it, we can move from reactive to proactive planning each year. The benefits of doing so add up!
Think of it this way: A doctor can offer general wellness advice, but a thorough check-up with your actual lab results allows for a far more precise and personalized plan. Your tax return is our version of those lab results.
When you share your return with us, we can:
- Tailor your investment strategy to your specific tax situation
- Model Roth conversion scenarios with better numbers
- Coordinate your withdrawal strategy across taxable, tax-deferred, and tax-free accounts
- Flag changes in your income or life circumstances that might require a planning adjustment
What You Should Do Right Now
If you've recently filed your tax return, here are three simple steps:
- Send us a copy: A PDF of your most recent federal (and state) return is all we need. When sending sensitive private information, we recommend using an encrypted email or we can send you an encrypted portal for secure upload.
- Schedule a tax planning conversation: Next time we meet, let's carve out 30–45 minutes to walk through what we're seeing and identify opportunities for the year ahead.
- Let us know about any changes: New job, business income, inheritance, major sale, or life event? These all have tax implications worth planning around.
The Bottom Line
Tax planning is an ongoing conversation. Some long-term tax planning strategies may cover years or even decades. The best outcomes come from working together throughout the year, starting with a close look at last year's return. We're here to help you make the most of every opportunity the tax code allows!
If tax planning and a return review has been on your mind since filing, hit REPLY and let us know! We’ll streamline the process for you and believe doing so will increase your peace of mind that no tax planning stone has been left unturned.
ADVICE IN ACTION
When the Numbers Tell a Better Story Than Expected
When a married couple came in for a comprehensive planning review, they thought it would be a routine check-in or a new sales pitch to consider. The husband had a rough retirement spending number in mind once the house was paid off. Years of disciplined saving and sacrifice was meant to provide flexibility and freedom at some point in the future, but the actual details and numbers were never calculated or discussed.
After reviewing the full picture together, these hardworking and careful savers can spend more…and sooner than expected! The question shifted overnight from "Can we afford to retire?" to "What kind of life do we actually want to build?"
The review also turned up gaps that had nothing to do with investment returns:
- Expensive retirement account contributions they may not have been eligible to make while missing a simple, low-cost retirement plan at work
- High-cost legacy retirement plan benefits for their small business
- Tax location optimization, Roth conversion strategies, and other tax planning opportunities estimated to provide seven-figure benefits
These planning gaps can be addressed with thoughtful implementation and disciplined mindset; the same mindset that helped build this legacy.
To us, financial planning isn't just about picking the right investments. It's about looking at the whole picture - taxes, retirement accounts, insurance, estate documents, and spending assumptions - and making sure everything works together.
You may be surprised by the value of an open, honest conversation. Each of us reach a point when it’s OK to stop building and start stewarding.
Section 3: WHAT WE’RE READING
Atomic Habits by James Clear
Atomic Habits by James Clear is a practical guide to building good habits and breaking bad ones. It argues that achieving a 1% improvement every day compounds into massive results. Rather than focusing solely on goals, readers are taught to design sustainable "systems" and shift their personal identity.
The Great Rotation: When valuations start to matter again
by Vanguard Expert Perspective
After more than a decade of U.S. equity dominance, a strong rally in international markets has investors debating whether a "great rotation" away from mega-cap U.S. tech stocks is finally underway. Those in favor of the rotation point to rising global infrastructure spending, energy investment, and supply-chain reshoring as catalysts for capital-intensive sectors worldwide, while skeptics argue the U.S. remains the best incubator of high-growth companies and still deserves a core allocation. The key theme throughout is valuations. While they can't time the market, stretched multiples leave little cushion when sentiment shifts, as seen in the recent tech sector selloff. Vanguard's bottom line: investors are best served by broadening their exposure to more reasonably valued segments of global markets rather than staying concentrated in U.S. large-cap tech. Read the full article here.
Making the Most of Financial Legacy Decisions: The Behavioral Divide by Avantis Investors
There are plenty of logical reasons to devote some of our current wealth to future generations, such as supporting a better future for your family or society, the potential for tax benefits, and simply a common desire to build a legacy that endures beyond our lives. But tradeoffs abound when it comes to making such legacy decisions, not the least of which is how much do I want or need for myself today versus how much am I willing to give others for the future. Our choices may also be influenced by tendencies of human behavior or even our experience and feelings about legacy decisions of past generations. Watch the discussion here.
INSIDE KINETIC
Kinetic Wealth is an investment adviser registered in Tennessee and offering services in other states where properly registered or exempt from registration. This is a required compliance statement reflecting the type of business we are, and the spirit behind compliance statements like this is the hope the public better understands what they’re reading and who they’re engaging with.
In a way, it’s a reflection of reality. We created this organization to provide what we believe to be the best financial planning experience for those we serve best. Many others across the country are doing the same, not only in our industry, but in many industries. Technology advancement is not only leveling the playing field between big companies and startups, but in some ways, it’s allowing startups and small companies to provide more value at the same, or in some cases even lower costs. We believe that’s important.
Even though we are one investment adviser firm of over 20,000 here in the United States, we’re trying to do our part to make our industry better. Not better for firms, but better for consumers. We participate in industry groups and stay current in the evolution of financial planning and advice.
We’re excited to share that Skee Orr, CFP®, AIF®, ATP was personally invited to apply and has been accepted as a Board Member of the National Association of Personal Financial Advisors (NAPFA) South Region. In this position, his focus will be on bringing more fee-only fiduciary advisors together to share best practices and ideas, ultimately to serve clients better.
Our industry involvement aligns with our mission of Empowering Fulfillment + Enhancing Communities, in this instance by promoting the education of consumers and empowering likeminded professionals to keep the interests of their clients in the forefront of their work. We’re grateful to NAPFA for considering us and are excited to serve.
To learn more about NAPFA, visit their website at https://www.napfa.org/
Thank you for reading the third edition of The Fiduciary Guide.
Our hope is that this monthly note gives you something practical to think about, something helpful to learn, and a better sense of the values behind Kinetic Wealth. If a topic in this issue raises a question for you or your family, hit REPLY! We’d love to talk.
Warmly,
Kinetic Wealth