Financial planning for lawyers allows them a comfortable retirement depending on how they choose to allocate and draw down as time goes by.
Breaking into the world of finance can be quite challenging, and oftentimes, professionals like lawyers, celebrities, and business owners can find themselves feeling quite intimidated. However – your career doesn’t have to be a roller coaster ride with so many financial pitfalls along the way. What most people might not know is that there are certain ways in which you can ensure that your financial worries do not get the best of you by literally putting your financial security first as well as maximizing any opportunities that might arise.
According to research, attorneys in the US normally work for roughly 80 hours a week. Regardless of one’s work or status, lawyers need to pay attention to their own financial lives too. Putting in a lot of time for your clients and taking care of their needs is just one part of the overall picture. With that, financial planning for lawyers is very important as well.
When you have a business and are on top of things personally, as well as professionally, one has got to keep control over their finances too! Seeking help from trusted professionals for the financial planning for lawyers will help you make sure that you’re always ahead of any curve, financially speaking!
1. Management of complex responsibilities
The majority of lawyers lack the time and extensive financial background to make decisions about how to handle their finances. Unfortunately, this makes them at risk for many cases of depression, burnout, and other common psychological problems. When this happens, people are not as productive or effective in their professions as they would like to be. And that is why financial planning for lawyers is essential for lawyers to manage their high income and responsibilities properly.
2. Debt Management
Many lawyers start their careers in debt. According to some studies, about 1/3 of lawyer graduates can be burdened by an average of $139,000 in educational debt when joining the job market. Added to other obligations such as mortgage payments and car loans, lawyers can find it difficult to pay back hundreds and thousands of dollars each month. Not to mention the extremely competitive job market they have to navigate, making it even more difficult for graduates who don’t get working straight away!
With the help of financial planning for lawyers, you can accelerate payments on any of your loans that have higher interest rates. A financial planning expert can assist the lawyers in conducting an analysis that allows them to anticipate how best to pay off their current debt as well as plan for long-term savings without doing too much damage on the side or running into trouble later.
3. Managing Taxes
When the attorneys reach their highest earning time, they commonly accumulate large amounts of wealth. And as a result, it’s not unusual for them to fall into an upper tax bracket. If they work for corporations, they may also receive company stock or stock options. Or, if they are partners in their firm or have some ownership stake, they may receive partnership shares that allow them either voting or otherwise indirect control over the running of the firm and/or the capitalization it has raised.
High earning comes along with big tax liabilities, and a financial planner can greatly help a high earning lawyer minimize the tax on the income through several smart strategies.
4. Asset Protection
The threat of financial loss always looms over the lawyers who are handling high settlement cases. That’s why lawyers must take every safety precaution to protect their livelihood, especially during millionaire dollar lawsuits or peak earning a time of their lives.
One way a litigant might try to get their hands on the assets that you’ve worked so hard for is by going after your savings and investment funds connected to the brokerage account, but that doesn’t mean there aren’t any solutions for you out there. Financial planning for lawyers can advise you about strategies for safeguarding your assets from both plaintiffs and creditors.
5. Managing savings
Financial planners can help lawyers reach their financial objectives by recommending investment plans that are based on expectations and specific financial goals such as retirement, college tuition for children, or purchasing a new home. In addition, they can recommend an asset allocation strategy for creating diversified portfolios of stocks and bonds to help the lawyer reach these goals.
6. Retirement Planning
After rewriting the primary source of income, the lawyers will switch their salary to investments, and they thus should play an increasingly important role in determining your lifestyle at this stage of the game.
Financial planning for lawyers allows them a comfortable retirement depending on how they choose to allocate and draw down as time goes by, but of course, if you run the risk of outliving your savings with fewer dollars than originally intended, obviously, that would be very undesirable too!
Lawyers are among the busiest and most involved professionals. Giving their best to each case is part of their duty, and that is why financial planning for lawyers is very important for them. If you’re a lawyer by profession then contact an expert financial planner today.