5 Questions to Find Out – Is a Roth IRA Conversion Right for You?

When considering a Roth IRA conversion, the decision often comes with questions and complexities. A Roth conversion involves transferring funds from a traditional IRA into a Roth IRA, paying taxes on the amount converted today, in exchange for tax-free growth potential and withdrawals in the future. Let’s explore when a Roth conversion makes sense, what to consider, and some real-life scenarios to help guide your decision-making process.

Five Key Questions to Ask Before a Roth Conversion

1. What is my current tax bracket, and how might it change in the future?

   Converting to a Roth IRA involves paying taxes now, so understanding your current and future tax rates is critical.

2. Do I have the cash available to pay the taxes?

   Using funds outside your IRA to pay the taxes is often a better strategy than withdrawing from the IRA itself.

3. What is my time horizon for needing these funds?

   A longer time horizon provides more opportunity for tax-free growth, making a conversion more advantageous.

4. Will this conversion push me into a higher tax bracket?

   Converting too much in one year can increase your taxable income significantly.

5. Am I planning to leave a legacy?

   Roth IRAs offer tax-free inheritance benefits, making them a strategic option for wealth transfer.

When Does a Roth Conversion Make Sense?

1. During a Market Downturn

   Converting during a market downturn means you pay taxes on a reduced account value. When the market recovers, those gains grow tax-free in the Roth IRA.

2. In Low-Income Years

   If you anticipate your income will be lower for a specific period, converting in those years can minimize the tax burden.

3. Before Required Minimum Distributions (RMD’s) Begin

   Converting before age 73 (when RMD’s start) can reduce your taxable income during retirement.

4. For Legacy Planning

   Roth IRAs do not require RMD’s for the account owner, allowing growth potential tax-free for heirs.

5. To Hedge Against Future Tax Rate Increases

   If you expect tax rates to rise in the future, paying taxes now at a lower rate may save money in the long term.

Benefits of a Roth IRA Conversion

1. Tax-Free Growth Potential and Withdrawals:

   • Once funds are in a Roth IRA, they grow tax-free and can be withdrawn tax-free after age 59½ and meeting the five-year rule.

2. No RMD’s:

   • Unlike traditional IRA’s, Roth IRA’s do not require account holders to take RMDs, allowing growth potential tax-free.

3. Legacy Benefits:

   • Roth IRA’s can be inherited tax-free by your beneficiaries, providing a valuable wealth transfer tool.

When It Makes Sense to Stay with a Traditional IRA

1. If You Expect Lower Taxes in Retirement:

   • If you anticipate being in a significantly lower tax bracket in retirement, paying taxes then may be more advantageous.

2. If You Don’t Have Funds to Pay Taxes:

   • Using IRA funds to pay taxes can reduce the benefits of the conversion.

3. If the Conversion Pushes You into a High Tax Bracket:

   • Large conversions can create unintended tax consequences.

Real-Life Examples of Roth Conversions

Example 1: Lower Tax Bracket Year

Sarah, 57, transitioned to part-time work and had a significantly lower income for two years. She used this window to convert $50,000 of her IRA to a Roth, paying taxes at a reduced rate. With over a decade before needing the funds, she now enjoys tax-free growth potential and confidence knowing her heirs will inherit the Roth tax-free.

Example 2: Market Downturn Conversion

David, 63, saw his IRA balance drop by 20% during a market downturn. He converted $100,000 to a Roth IRA, paying taxes on the reduced value. When the market recovered, the gains accrued tax-free, significantly increasing the after-tax value of his retirement savings.

A Thoughtful Approach to Roth Conversions

Roth conversions can be a powerful tool in your financial strategy but must be approached carefully. Your decision should factor in current and future taxes, cash flow, and long-term goals. While the benefits can be substantial, a Roth conversion isn’t right for everyone.

Before making a conversion, consult with your financial and tax advisors to evaluate your unique situation and ensure the strategy aligns with your broader financial plan.

Important Disclosures:

For additional guidance on Roth conversions and other wealth planning strategies, contact Gatewood Wealth Solutions. Our team is here to help you navigate your financial future with confidence.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk including loss of principal. No strategy assures success or protects against loss.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC

The Cash Strategy That Could Transform Your Wealth in 2025

What if the money sitting in your savings account—the cash you think isn’t “working hard enough”—is actually your most powerful wealth-building tool?

When Everything Changed for the Johnsons

Meet David and Sarah Johnson. Successful professionals. Smart investors. They’d been told by their previous advisor to “put every dollar to work” and minimize cash holdings. When the 2008 market crash hit, they watched their retirement accounts plummet just as David lost his job.

With no meaningful cash reserves, they faced an impossible choice: liquidate investments at their lowest point to pay bills, or rack up debt on a line of credit their advisor had recommended as a “cash alternative.”

They chose the line of credit. Big mistake.

By the time David found work eighteen months later, they’d accumulated $75,000 in debt at variable interest rates. Worse, they’d missed the entire market recovery because every spare dollar went to paying down that debt instead of buying investments at rock-bottom prices.

The Johnsons learned a hard lesson:

It’s not what you make on cash that matters, but what cash allows you to make on everything else.

The Gatewood Cash Philosophy: Savings vs. Investments

At Gatewood Wealth Solutions, we make a crucial distinction that most advisors ignore. Savings are inherently less risky, and the funds are liquid. Investments are 100% at risk 100% of the time. This isn’t just semantics. It’s the foundation of building enduring wealth with purpose.

Many advisors will tell you to “put your cash to work” in something “safe.”

Here’s the truth: there is no such thing as a safe investment. All investments carry the risk of loss. When someone says they want their cash to “make money,” they’re confusing the purpose of cash with the purpose of investments.

Cash serves two critical functions in wealth building:

1. To avoid liquidating investments at the wrong time
2. To seize opportunities

Notice both purposes matter most when investment values decline. That’s not coincidence—it’s strategy.

What This Means: The Mathematics of Opportunity

Let’s examine what happened to Jane, a hypothetical 65-year-old retiree with a $2 million IRA, planning to withdraw $140,000 annually (7% of her initial balance). ¹

Scenario 1: No Cash Strategy

Jane withdraws systematically from her S&P 500 investments regardless of market performance during the period 1973-1988.

Result at age 80: $1,442,897.

Scenario 2: Strategic Cash Reserve

Jane uses cash reserves during the four down market years, preserving her investments when values are depressed.

Result at age 80: $3,763,052.

The difference? A staggering $2.3 million.

Here’s what makes this remarkable: the investment performance was identical in both scenarios. The only difference was having $478,146 in cash to tap during down years.

Even if Jane earned absolutely nothing on that cash, her outcome was dramatically better.

Why This Matters: The Line of Credit Trap

Most advisors today recommend lines of credit as “cash alternatives.” They’ll say, “Why keep cash earning nothing when you can access credit when needed?”

This approach adds both cost and risk to your financial plan.

The Hidden Costs: 

• Interest payments on borrowed funds
• Variable rates that can spike unexpectedly
• Loan payments that prevent you from buying investments when they’re cheapest
• Credit limits that can be reduced exactly when you need them most

The Real Risk: Lines of credit turn temporary market downturns into permanent wealth destruction. Instead of having cash to weather storms and capture opportunities, you’re paying interest and missing recoveries.

At Gatewood, we believe wealth is personal. Your cash needs are unique to your situation, your goals, and your confidence.

The Gatewood Cash Formula

Our process-driven approach calculates your optimal cash position based on your life stage:

Accumulation Phase:

3-6 months of expenses for emergencies. This protects your systematic investing strategy (dollar-cost averaging) from being derailed by life’s unexpected moments.

Approaching Retirement:

Gradual accumulation toward your 24-month target, ensuring you enter retirement with adequate liquidity.

Distribution Phase:

24 months of your income shortfall after guaranteed sources like Social Security and pensions. This creates a buffer that allows your investments to recover from market downturns.

An Analogy That Clicks

Think of cash like the foundation of a house.

You don’t build a foundation to be beautiful or to generate income. You build it to support everything else. The stronger your foundation, the taller and more ambitious your structure can be.

Cash works the same way in your financial plan. It’s not there to generate returns—it’s there to support higher returns in your investment portfolio by giving you the confidence to take appropriate risks and the flexibility to act when opportunities arise.

Would you rather have a beautiful foundation that crumbles under pressure, or a solid foundation that allows you to build wealth that endures?

When Lines of Credit Do Make Sense

To be clear, we’re not opposed to all forms of credit. Securities-backed lines of credit can serve a strategic purpose in specific, short-term situations where cash flow timing creates temporary gaps.

For example, if you’re buying a new home before your current one sells, a securities-backed line provides bridge financing without forcing you to liquidate investments or miss out on your dream property.

Similarly, if you’re expecting a substantial bonus, stock options vest, or you’re closing on the sale of a business within a few months, using credit to bridge that gap can make perfect sense. The key distinction is timing and certainty.

These are situations where you have reasonable confidence that cash will follow in a relatively short period—typically 3-6 months. What we caution against is using lines of credit as a permanent cash substitute or relying on them for unpredictable expenses where the repayment timeline is uncertain.

The difference between strategic short-term leverage and dangerous cash replacement is the difference between a useful tool and a wealth destroyer.

Other circumstances where securities-backed lines of credit might make sense include:

• Tax payment timing (when you know a refund is coming)
• Seasonal business cash flow needs with predictable revenue cycles
• Taking advantage of a time-sensitive investment opportunity when a planned asset sale is imminent
• Emergency situations where immediate access is needed and cash reserves are being replenished through planned distributions

The Gatewood Difference

While other advisors chase yield on every dollar, we focus on purpose. We keep your priorities the priority.

Our relationship-driven approach means we understand your unique situation, your concerns about market volatility, and your need for confidence in uncertain times. The true value of planning is the confidence it creates.

We’re not product-driven—we’re process-driven. We don’t sell you investments. We guide you through building enduring wealth with purpose so you can have confidence for life’s key moments.

With expertise and care, our team monitors your cash position throughout different market cycles, adjusting as opportunities arise or as your circumstances change.

What Happens Next

During strong markets, we deploy cash strategically at lower valuations. As markets reach new highs, we begin raising cash by taking profits in specific asset classes. During weak markets, we may redeploy cash at lower valuations or spend down reserves to give investments time to recover.

This isn’t market timing—it’s strategic cash management that puts you in control of your financial destiny.

Your Next Step

If you’re tired of advisors treating every dollar the same, if you want a wealth strategy built around your unique situation and goals, if you’re ready to discover how proper cash management can supercharge your investment returns, we should talk.

Don’t let another market cycle catch you unprepared. Don’t rely on debt to fund opportunities or weather storms.

Ready to discover what your cash can really do for your wealth?

Schedule a conversation with our team to learn how Gatewood’s cash philosophy can transform your financial confidence. Because at Gatewood Wealth Solutions, we understand that wealth with purpose starts with understanding what each dollar should accomplish.

Remember: It’s not what you make on cash that matters, but what cash allows you to make on everything else.

References

(1) Hypothetical example for illustrative purposes only. Beginning value $2,000,000 in IRA; S&P 500 historical return during 1973-1987, including dividends; $140,000 withdrawal each year: $0 withdrawal in years after a negative return except for required minimum distribution. These numbers do not reflect fees and charges associated with an actual investment. Historical S&P 500 returns from Bloomberg. The S & P 500 Index is a list of securities frequently used as a measure of U.S. Stock Market performance. Required minimum distributions from the IRA under Federal Tax Law. Source of diagrams from Northwestern Mutual’s brochure, “Down Markets Matter”, 67-0788 (0715).

(2) Investopedia – A required minimum distribution (RMD) is the amount that traditional, SEP or SIMPLE IRA owners and qualified plan participants must begin distributing from their retirement accounts by April 1 following the year they reach age 70.5. RMD amounts must then be distributed each subsequent year based on the current RMD distribution calculation amounts. http://www.investopedia.com/terms/r/requiredminimumdistribution.asp#ixzz4nzGcn0T4

(3) The primary purpose of permanent life insurance is to provide a death benefit. Using cash values to supplement your retirement income will reduce the benefit and may affect other aspects of your life insurance plan. Accessing the cash values through policy loans, surrenders of dividend values, or cash withdrawals will or could; reduce death benefit; necessitate greater outlay than anticipated; or result in an unexpected taxable event. Assumes a non-Modified Endowment Contract (MEC).

(4) Dollar-cost averaging (DCA) is an investment technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. The investor purchases more shares when prices are low and fewer shares when prices are high. Dollar Cost Averaging (DCA) – Investopedia www.investopedia.com/terms/d/dollarcostaveraging.asp

(5) Higher returns are not guaranteed through this strategy. However, it is a sound strategy to help manage downside risk and can achieve improved outcomes as explained in the retirement distribution example in this report.

Important Disclosures:

¹This is a hypothetical example and is not representative of any specific investment. Your results may vary. (88-LPL)

Securities and advisory services are offered through LPL Financial, a registered investment advisor and broker-dealer, Member FINRA/SIPC.

Insurance products are offered through LPL or its licensed affiliates. Gatewood Wealth Solutions is not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Gatewood Wealth Solutions and may also be employees of Gatewood Wealth Solutions. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Gatewood Wealth Solutions.

Securities and insurance offered through LPL or its affiliates are:

• Not Insured by FDIC or Any Other Government Agency
• Not Bank Guaranteed
• Not Bank Deposits or Obligations
• May Lose Value

A Smarter Glide Path for College Savings

Most 529 plans take a conservative approach to risk. What if being too cautious early on means leaving thousands of dollars on the table?

At Gatewood Wealth Solutions, we believe the key to smarter college savings is compounding earlier—when you have the time—and only dialing back risk when it truly matters. In this post, we walk through our custom 529 glide path and compare it to the most common industry average.

Why Glide Paths Matter in 529 Plans

Glide paths are automated investment changes. In 529s, most glide paths reduce equity (stocks) and increase fixed income (bonds/cash) as the beneficiary enters elementary school. It sounds sensible, but the problem is: these providers reduce risk far too early.

Most Gatewood clients don’t touch 529 money until the first year of college. Even then, withdrawals happen over four years. Many families don’t fully spend the accounts at all—preserving them for legacy planning. If the money is invested too conservatively for too long, it underperforms significantly.

That’s where the Gatewood Glide stands apart.

Our Glide Path 

Gatewood’s 529 Glide:

• Starts at 100% equity
• Moves to 60% equity/40% bonds at high school entry (~age 14)
• Drops to 30% equity / 40% bonds / 30% cash at college entry (~age 18)

This gives investors the opportunity to benefit from long-term market growth while still adjusting tactically later if needed.

Glide Path Comparison: Equity Allocation by Milestone

Equity Glide Paths

Why It Matters

We are a regulated industry, so publishing expected equity returns can be difficult. However, investors are aware of a consistent equity premium earned in the long run from taking equity risk over fixed income and cash.

Eighteen years is a long-term horizon. We believe that maintaining an average allocation above 80% equity during the growth years aims to lead to better results compared to the typical glide, which tends to average below 60% equity.

Finally, 529 plans are more than just tax shelters. They’re strategic long-term tools. By defaulting too conservative, traditional glide paths underserve many families. At Gatewood, we believe in giving your savings room to grow, with thoughtful transitions when the time is right.

Our 529 strategy reflects how clients really use their plans:

• Continued contributions during high school
• Maintain flexibility around college withdrawals
• Preserve asset for legacy planning

If you’re interested in building a 529 plan that aligns with your goals, we’re here to help.

Building a Better 529 Plan Strategy

Also read: Rethinking the 529: A Legacy Vehicle Hiding in Plain Sight
Explore how 529 plans can extend beyond college savings and support multi-generational wealth planning.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk including loss of principal.  No strategy assures success or protects against loss.

This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing.

Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

The 10 Reasons People Choose Gatewood as Their Financial Advisor

The 10 Reasons Why People Hire a Gatewood Advisor

When considering a financial advisor, clients typically interview just one or two firms. At Gatewood Wealth Solutions, we recognize the importance of making a lasting first impression that aligns with our clients’ core values and expectations. Inspired by insights from financial expert Michael Kitces and Morningstar’s 2023 study “Why Do People Hire Their Financial Advisors?”¹ we’ve refined the top ten reasons our clients choose Gatewood:

Emotional Drivers

1. Trust & Integrity

Trust forms the foundation of every advisory relationship. At Gatewood, we prioritize transparency and fiduciary responsibility, aiming to ensure our clients feel secure knowing we always place their best interests first.

“The values-driven team of Gatewood Wealth Solutions is motivated, caring, highly competent and personally fueled by character and integrity.” — Dave M., Corporate Executive

 

2. Clear and Consistent Communication

We simplify complex financial concepts and maintain proactive communication. Our advisors listen deeply and seek to ensure clients always understand and feel heard throughout their financial journey.

2. Relief from Financial Anxiety

Managing finances alone can be overwhelming. Gatewood advisors provide confidence by taking the burden of financial complexity off clients’ shoulders, guiding them confidently toward their goals.

“Their unwavering support made a world of difference during such a challenging time. I am profoundly grateful for all they’ve done and continue to do for me.” — Carol S., Corporate Executive 09.20.23*

 

Financial Expertise

4. Personalized Investment Guidance

Gatewood offers customized investment advice meticulously aligned with our clients’ long-term objectives, so that decisions are based solely on clients’ best interests and not outside incentives.

“Gatewood Wealth Solutions gives me confidence that my retirement savings are being monitored and managed with MY best interest in mind.” — Gary B., Corporate Executive 09.27.23*

 

5. Specialized Problem-Solving

Our advisors are equipped to handle specific financial challenges such as tax optimization, retirement income planning, and estate management. We tailor each solution to address unique client circumstances effectively.

“Their planning services are comprehensive and consider all assets of our family, not just what they manage.” — Tim M., Partner/Attorney 09.22.23*

6. Proactive Strategic Planning

Life changes rapidly, and Gatewood advisors remain ahead of market cycles, income variations, and unexpected life events, proactively preparing clients to navigate and capitalize on these changes.

Situational Advantages

7. Personalized, Holistic Financial Plans

At Gatewood, financial planning extends beyond just numbers. We integrate our clients’ personal values, life stages, and aspirations into comprehensive strategies that align financial decisions with life goals.

“The Gatewood team developed an integrated financial and retirement plan that we refined together. I’m pleased to say we are well ahead on our plan!” — Phil P., Retired Corporate Executive 09.20.23*

 

8. Local Accessibility and Engagement

With our established presence in St. Louis, Gatewood clients benefit from direct access and face-to-face interactions. Our local roots and active community involvement offer reassurance and familiarity. For clients in the 30+ states outside of the St. Louis Metro Area, we frequently travel for in-person visits.

8. Tangible Quick Wins

We demonstrate value early by providing immediate, actionable insights and measurable results. Gatewood clients frequently experience beneficial outcomes quickly, reinforcing their decision to partner with us.

8. Real-Life Client Success Stories

Prospective clients appreciate authentic stories from those who’ve experienced our commitment firsthand. At Gatewood, we regularly share testimonials and case studies illustrating our dedication to client success, fostering confidence before the relationship even begins.

“As Pam and I navigate these retiring years, she and I both derive a rich sense of security knowing that John and the team at Gatewood Wealth Solutions will continue to surround and support her for as long as needed.” — Steve K., Retired Corporate Executive 09.27.23*

 

At Gatewood Wealth Solutions, our advisors may not address every potential motivator—but we passionately deliver on the ones that align most closely with our clients’ values: trust, clear communication, personalized strategies, and local, accessible expertise. These core areas define why our clients not only choose us initially but remain committed partners for life.

Sources:

¹Morningstar 2023, “Why Do People Hire Their Financial Advisors?” via Kitces

Important Disclosures:

*The statements provided are testimonials by clients of the financial professional as of 7/22/2025. The clients listed have not been paid or received any other compensation for making these statements. As a result, the client does not receive any material incentives or benefits for providing the testimonial. These views may not be representative of the views of other clients and are not indicative of future performance or success.

The Big Beautiful Bill: Tax Law Strategies for High Earners

Learn more about the history of the One Big Beautiful Bill Act →

A Moment of Change: Why the 2025 Tax Law Update Matters

In July 2025, Congress passed a sweeping set of tax and financial legislation known as the “One Big Beautiful Bill” (BBB). The bill brings several major updates relevant to high earners, business owners, and families managing multi-generational wealth. While the intent of the legislation is to create longer-term clarity, the changes present important planning opportunities—and potential pitfalls.

At Gatewood, we believe in building wealth with purpose. That includes guiding you through significant legislative shifts like these, helping you assess what matters most to your goals, and adjusting strategy with confidence.

What’s Changing: Key Provisions That Could Impact You

Income Tax Rates Made Permanent

Previously set to expire in 2025, the Tax Cuts and Jobs Act (TCJA) rates are now permanent. This means:

• The seven-bracket structure (10%, 12%, 22%, 24%, 32%, 35%, 37%) continues
• Bracket thresholds will remain inflation-adjusted
• Slight tweaks enhance benefits for lower-income households

Why it matters: With future rates more predictable, Roth conversions, capital gain harvesting, and income acceleration strategies can now be explored with greater confidence.

Higher Standard Deduction + Cap on Itemized Deduction Benefits

The standard deduction has been permanently increased to $32,000 (MFJ), $16,000 (Single), indexed for inflation.

However, a new cap limits the value of deductions for top earners:

• All itemized deductions (SALT, mortgage, charitable, etc.) are capped at $0.35 benefit per $1 deducted for those in the top bracket
• This replaces the prior Pease limitation

Planning Insight: Consider “bunching” deductions and using Donor Advised Funds to maximize limited itemized value.

Estate and Gift Tax Exemption Increased

The estate and gift tax exemption, previously set to revert to ~$5 million, has been increased to $15 million (indexed), now permanent.

Planning Consideration: High-net-worth families should revisit gifting plans, especially those using valuation discount strategies.

State and Local Tax (SALT) Deduction Expanded Temporarily

The SALT cap has been increased to $40,000 (phasing out for income > $500,000) through 2029. It returns to $10,000 in 2030.

Strategic Tip: Consider timing payments or leveraging non-grantor trusts to capture the deduction while available.

Charitable Giving Rules Shift

Non-itemizers can now deduct up to $2,000 (MFJ) annually. Itemizers will only receive a deduction for charitable contributions that exceed 0.5% of income.

Implication: Planning and timing of gifts, especially large charitable contributions, are now more important. Qualified Charitable Distributions (QCDs) and Donor Advised Funds remain essential tools.

Beyond the Headlines: Planning Impacts by Focus Area

Cash Flow and Debt Planning

• Car loan interest up to $10,000 is deductible (for U.S.-assembled cars, 2025–2028)
• Home equity loan interest remains non-deductible

Education and Family Planning

• New tax-preferred “Trump Accounts” allow a one-time $1,000 federal contribution per qualifying child born 2025–2029
• 529 plans expanded to cover more K-12 and credentialing costs

Retirement and Senior Considerations

• Seniors (65+) get an extra $6,000 standard deduction (2025–2028)
• HSA access and contributions may be expanded if employer coverage continues past age 65

Health and Disability Planning

• ABLE account enhancements made permanent, increasing flexibility for families with dependents who have disabilities

What to Do Next

These changes represent more than technical updates—they reshape how you plan. At Gatewood, our role is to help ensure that your strategy reflects these changes while keeping your long-term goals at the center.

Key Next Steps:

• Revisit your estate plan in light of the new exemption
• Evaluate Roth conversion opportunities before year-end
• Consider timing charitable and SALT-related deductions
• Explore how new education accounts or senior deductions might apply

Looking Ahead

Gatewood is here to help families navigate complexity with clarity and build wealth with purpose. If you have questions about how this legislation may affect your plan, schedule a conversation with our team today.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

Rethinking the 529: A Legacy Vehicle Hiding in Plain Sight

A Quiet Shift with Big Implications

When most people hear “529 plan,” they immediately think “college savings.” And for good reason. These state-sponsored plans have long been the go-to solution for parents and grandparents who want to fund a child’s education while reaping tax benefits.

But a quiet revolution is underway.

Thanks to a series of legislative updates over the past several years—including the Tax Cuts and Jobs Act, both SECURE Acts, and most recently, the One Big Beautiful Bill—529 plans have become more attractive, more flexible, and more expansive than ever. These updates have broadened the definition of “qualified education expenses,” added rollover opportunities to Roth IRAs, and removed financial aid penalties for grandparent-owned accounts. In short: this once narrowly focused tool has evolved into one of the most powerful, tax-efficient investment vehicles available.

The Game-Changer: One Big Beautiful Bill

The One Big Beautiful Bill took things a step further—doubling down on flexibility and long-term planning power. Starting in 2026:

• The annual K–12 withdrawal limit increases to $20,000 per beneficiary, up from $10,000.
• Qualified expenses now include curricular materials, books, tutoring, dual-enrollment fees, standardized test costs, and even certain homeschooling expenses.
• Non-college paths are embraced—vocational training, licensing programs, and professional certifications now qualify, further aligning 529s with the evolving definition of education.

This expansion significantly increases the relevance of 529 plans for families focused on long-term legacy planning. These aren’t just college accounts—they’re a tool to prepare the next generation for any path.

A Multigenerational Strategy in the Making

Imagine this: instead of waiting to pass wealth to future generations through trusts or posthumous bequests, you begin gifting into a 529 plan today. Not just for one child—but for each grandchild or even great-grandchild. Over decades, these accounts provide tax-free growth potential, and can be repositioned for education, vocational training, or even retirement.

And because the account owner can change the beneficiary as needed, the legacy can be sustained for generations.

Final Thoughts

At Gatewood Wealth Solutions, we believe in building Wealth with Purpose. That often means taking a fresh look at overlooked tools—and right now, 529 plans are a hidden gem for legacy-minded families.

Let’s stop thinking of the 529 as a college-only account. It’s time to recognize it for what it really is: one of the most tax-efficient, flexible, and powerful long-term planning vehicles we have.

Related Reading:

A Smarter 529 Investment Strategy
Learn how Gatewood’s custom glide path keeps your education savings aligned with your timeline—not just a default formula.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk including loss of principal.  No strategy assures success or protects against loss.

Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

The Financial Blind Spot: Why 85% of Your Employees Want Help—And Most Employers Aren’t Noticing

According to a 2025 study[1]  highlighted by Inc., nearly 85% of employees believe their employer should help them navigate financial challenges. Let that sink in.

That’s not a “nice to have”—that’s a near-universal expectation.

And yet, in many workplaces, financial wellness is either ignored, underfunded, or mistaken for a once-a-year 401(k) meeting.

As someone who advises companies on retirement plans, I’ve seen this firsthand. And here’s the truth: the companies who acknowledge and respond to this growing expectation aren’t just helping their people—they’re strengthening their own business.

A Simple Metaphor: Financial Stress Is a Dashboard Warning Light

Imagine you’re driving a car and the oil light comes on. You ignore it—after all, the engine still runs. A few weeks later, you’re stalled on the highway with a major repair bill.

Employee financial stress works the same way.

It’s often invisible. But it’s real, it’s chronic, and it’s impacting performance, health, and retention. Financial pressure weighs heavily on decision-making, focus, and emotional health—especially when there’s no guidance or support.

The Science of Financial Stress at Work

Psychologists refer to this as cognitive load—when the brain is overloaded with mental “tabs,” it can’t focus. According to WebMD Health Services[3], financial stress is the #1 stressor across income levels, and 1 in 4 employees say it directly impacts their productivity.

Additional research from Morgan Stanley’s 2025 Workplace Financial Benefits Study[2] found:

• 84% of employees want help with personal financial planning
• 66% say financial stress affects their work or personal life
• 68% of employees would stay longer if their employer offered meaningful financial wellness support.

This is no longer just a benefits issue—it’s a talent strategy issue.

Why Most Employers Miss the Mark

Despite overwhelming data, many employers still believe financial guidance is too personal, too complicated, or already “covered” by the 401(k) plan.

But here’s the disconnect: most 401(k) plans offer basic education, not personalized guidance. And they often ignore broader financial issues—like budgeting, debt, or emergency savings—that dominate employee stress.

This is like handing someone a map but not teaching them how to read it.

Simple Ways Employers Can Step Into the Gap

You don’t have to overhaul your benefits package to make a difference. Here are practical, low-cost ways to respond to this need:

1. Offer “Financial Office Hours” – Offer easy to access one-on-one meetings with a financial advisor (ideally one with no product agenda) where employees can ask basic questions—judgment-free.
2. Survey Your Team – Ask: “What’s your biggest financial concern?” and “Would you like more support from the company?” It opens the door and shows empathy. You can modify future education initiatives around their answers.
3. Add Financial Touchpoints to Existing Benefits – During open enrollment or onboarding, include simple guides on budgeting, emergency funds, and debt management. You could even provide a scheduling link to the financial advisor’s office hours calendar.
4. Curate Trusted Tools – Recommend vetted budgeting apps, podcasts, or free online courses—employees often just need help knowing where to start.
5. Normalize the Conversation – Create a culture where financial wellness isn’t taboo. When leadership talks about it, others feel safer engaging.
6. Continue Onsite 401(k) Education Meetings – Keep offering in-person 401(k) sessions, but raise your expectations. Collaborate with providers to ensure the agenda and talking points address the real financial concerns of your team—not just investment basics. These sessions should help bridge the gap between retirement planning and everyday financial wellness. It should address common employee questions and give you time back in your day.

Final Thought: From Retirement Advisors to Financial Allies

As a retirement plan advisor, my role used to revolve around plan design, investment lineups, and compliance. But today, the companies we serve expect more—and rightly so.

By stepping into the financial wellness gap, we’re not just helping employees retire well. We’re helping them live better now.

And if 85% of your workforce wants this? The only real question is—what are we waiting for?

Sources:

[1] Inc. Magazine citing John Hancock’s 2025 Financial Stress Survey – 85% of employees believe their employer should support their financial well-being.

Source: Inc. (2025). The Next Frontier of Employer Support? Financial Wellness.
https://www.inc.com/2025/03/financial-wellness-workplace-employee-benefits.html

[2] Morgan Stanley Workplace Financial Benefits Study, 2025

84% want help with financial planning, 66% say stress affects work/life, 68% say they’d stay longer if supported.
Source: Morgan Stanley at Work. (2025). The State of the Modern Workplace.
https://www.morganstanley.com/articles/workplace-financial-benefits-2025

[3] WebMD Health Services (2024–2025 Report)

Financial stress is the top stressor and directly impacts productivity.
Source: WebMD Health Services. (2024). Employee Well-Being Trends Report.
https://www.webmdhealthservices.com/resources/2024-well-being-trends-report/

Important Disclosures:

This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice.  Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.  In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations

When Dad Is Ready to Step Back: Succession Planning for Family Businesses

Picture this scenario: A successful business owner has spent decades building his company, and now his two adult sons are involved in the operation. One son is clearly positioned to take over as CEO, while the other plays a more supportive role. The father wants to be “fair” to both sons, but isn’t sure what that means in practice—should he split ownership equally?

How does he balance family relationships with business realities?

If you’re a family business owner, this hypothetical situation probably sounds familiar. You might be facing similar questions right now, or you know it’s a conversation you’ll need to have in the coming years. At Gatewood Wealth Solutions, we regularly work with families navigating these exact challenges, and this scenario illustrates why succession planning is about much more than just deciding who gets what—it’s about preserving both business success and family harmony.

The Challenge: When “Fair” Isn’t “Equal”

In our hypothetical family, the father initially thinks the solution is simple: split ownership equally between his two sons. After all, he loves them both equally, so equal ownership seems fair. But as we dig deeper with clients facing this situation, it becomes clear that “equal” might not actually be “fair.”

The son stepping into the CEO role would be carrying the day-to-day responsibility for the business, making tough decisions, and being accountable for results. The other son, while contributing to the business, wouldn’t be taking on the same level of responsibility or risk. Equal ownership could potentially create resentment on both sides—the CEO son feeling he’s doing more work for the same reward, and the other son feeling pressured to justify his ownership stake.

This dilemma highlights one of the most crucial questions in family business succession: How do you balance family relationships with business realities? As a Certified Exit Planning Advisor (CEPA), I’ve seen how this tension plays out in countless families, and there are proven strategies to address it.

The Questions That Matter Most

When Gatewood works with families in situations like this, we help them identify several critical questions that every family business should address:

About the transition itself:

• What does success look like for both the business and family relationships?
• How will the outgoing leader balance ongoing involvement with giving the next generation room to lead?
• What specific milestones or accomplishments need to happen before the transition feels complete?

About ownership and control:

• Should ownership be equal, or should it reflect each person’s involvement and contribution?
• How will major decisions be made if ownership is split?
• What happens if one owner wants liquidity in the future?

About the founder’s retirement:

• How will the founder fund his retirement lifestyle?
• Does he want to remain involved in an advisory capacity, or make a clean break?
• What legacy goals are tied to the business?

These aren’t just theoretical questions—they’re the foundation of every sound succession plan we develop at Gatewood.

The Hidden Landmines

Our team’s deep bench of experience has shown us that family business successions often fail not because of poor financial planning, but because of unaddressed emotional and structural issues. Here are the most common pitfalls we help families avoid:

• The Authority Trap: The new CEO expects to run the business with clear authority, but family members with equal ownership still want significant say in decisions. This creates operational paralysis and undermines leadership credibility.
• The Liquidity Time Bomb: If ownership is split equally but only one family member works in the business, the passive owner may eventually want to cash out. Without a funding plan, this can force distributions that strain cash flow or require the active owner to buy out siblings at potentially difficult times.
• The Vision Conflict: The founder built the business with his own style and risk tolerance. The next generation may want to modernize or grow more aggressively, creating conflicts about reinvestment versus distributions.
• The Emotional Undercurrent: Old family dynamics—who was the favorite, who was more responsible, who needed more support—can surface during succession planning and destabilize both business operations and family relationships.

At Gatewood, we’ve developed frameworks to help families identify and address these issues before they become problems.

A Better Approach: Structure Meets Heart

Let’s return to our hypothetical family and explore how Gatewood might advise them to structure their succession plan:

• Differentiated Ownership Structure: The son taking over as CEO would receive a larger ownership stake, reflecting his greater responsibility and risk. The other son would receive a meaningful but smaller stake, plus additional compensation for his ongoing contributions.
• Clear Governance: We’d help them establish a formal board structure with defined decision-making protocols, including which decisions require unanimous consent and which can be made by the CEO alone.
• Liquidity Planning: We’d create a structured buyout mechanism funded by life insurance and retained earnings, so if either son ever wanted to exit, there would be a clear, funded path that wouldn’t disrupt operations.
• Founder Transition: Dad would structure his retirement income through a combination of consulting fees for the first few years and ongoing distributions from his retained ownership stake.

This type of comprehensive planning is what we do every day at Gatewood—combining technical expertise with an understanding of family dynamics to create solutions that work for everyone involved.

The Roadmap Forward

If your family is facing a similar transition, here’s where Gatewood typically recommends starting:

1. Get Professional Help Early: This isn’t just about legal documents—you need advisors who understand both the technical and emotional aspects of family business transitions. Our team’s diverse expertise allows us to address every aspect of succession planning.
2. Have the Hard Conversations: Don’t avoid difficult topics hoping they’ll resolve themselves. Address expectations, fears, and concerns directly. We often facilitate these conversations to help families navigate sensitive territory.
3. Plan for Multiple Scenarios: What if the chosen successor becomes disabled? What if family members have a serious disagreement? What if someone wants to sell their stake? Our exit planning process considers all these possibilities.
4. Focus on Communication: Establish regular family business meetings separate from operational discussions. Create safe spaces for honest dialogue about both business and family concerns.
5. Think Beyond Taxes: While tax efficiency is important, don’t let it drive decisions that create family discord or business dysfunction. Gatewood takes a holistic approach that considers all aspects of wealth transfer.

The Ultimate Goal

Imagine our hypothetical family one year after implementing their succession plan. The business is thriving, the brothers are working well together, and Dad is enjoying his newfound freedom while still feeling connected to the enterprise he built.

Their success wouldn’t come from finding the perfect legal structure or tax strategy—it would come from honest communication, careful planning, and a willingness to address both the business and emotional aspects of succession. This is exactly the type of outcome we help families pursue at Gatewood Wealth Solutions.

Remember, family business succession isn’t just about transferring ownership—it’s about preserving what matters most: the business that supports your family and the relationships that define it. When done thoughtfully, succession planning can actually strengthen both the enterprise and the family legacy for generations to come.

The key is starting the conversation before you need to. Don’t wait until retirement is imminent or health issues force the decision. The families who navigate succession most successfully are those who begin planning early, communicate openly, and get professional guidance to help them through the process.

Why Choose Gatewood?

At Gatewood Wealth Solutions, we understand that every family business is unique, but the challenges are remarkably similar. My background as a Certified Exit Planning Advisor, combined with our team’s deep bench of expertise, allows us to provide comprehensive solutions that address both the technical and emotional aspects of succession planning.

We don’t just create plans—we help families implement them in a way that honors their legacy. Our holistic approach considers your business operations, family dynamics, tax implications, and personal goals to create a succession strategy that works for everyone involved.

If you’re a family business owner facing succession planning questions, or if you know these conversations are on the horizon, the time to start planning is now. Your future self—and your family—will thank you for it.

About the Author

Jared Freese, CFP®, CLU®, CEPA, ChFC®, is a Wealth Advisor Manager for Gatewood Wealth Solutions, specializing in family business succession planning and wealth transfer strategies. He helps families navigate the complex intersection of business operations, family dynamics, and financial planning that aims to ensure successful transitions across generations.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This is a hypothetical example and is not representative of any specific investment. Your results may vary.

How to Build a 401(k) Lineup with Passive and Active Fund Strategies

In designing a 401(k) lineup, empirical research favors passive index funds for core exposure, complemented by a few targeted active funds where managers have historically added value. Studies show that index funds generally outperform active peers in most asset classes (Morningstar, 2023)[1]. Meanwhile, certain market segments (international equity, fixed income, small-cap value, large-cap growth) exhibit inefficiencies that skilled active managers can exploit. The resulting hybrid strategy combines a passive core with selected active satellites to improve net outcomes.

Passive Style-Box Coverage

Passive core funds should cover all nine equity style boxes (large/mid/small crossed with value/blend/growth) at low cost. This broad coverage ensures participants receive market-like exposure without stock-picking risk. Passive funds have low fees, minimal turnover, and reduce behavioral risk.

• • Passive core funds span the full style-box grid, giving exposure to value, blend, and growth stocks in each size tier.

• • Low fees mean higher net returns: even small expense differences compound into large performance advantages.

• • Research shows passive funds dominate core equity: over long horizons, most active large- and mid-cap funds underperform.

Rationale for Active International Equity

• Market Inefficiencies: Non-U.S. markets exhibit more complexity — including variable accounting standards, political risks, and currency volatility — which can create opportunities for skilled managers.

• • Long-Term Evidence: Morningstar’s 2023 Active/Passive Barometer shows that approximately 40% of active international large-blend managers outperformed their average passive peers (Morningstar, 2023)[1] over the past 10 years. While not a majority, this is notably higher than the 10-year success rate for U.S. large-blend managers, which is closer to 10%. This relative improvement highlights that international equity markets may offer more opportunity for skilled active management due to greater inefficiencies and dispersion. (Source: Morningstar Active/Passive Barometer, 2023)

Rationale for Active Fixed Income

• Market Structure: The bond market is less efficient than equity markets. There are thousands of issuers and individual securities, most of which are not traded daily and have no centralized exchange. Bonds differ by coupon, maturity, credit rating, and call provisions — making analysis and pricing less transparent.

• • Manager Flexibility: Active bond funds can shift credit exposure, shorten or lengthen duration, and overweight undervalued sectors (e.g., MBS, corporates) based on macro trends. Indexes cannot.

• • Long-Term Evidence: Over the 10 years ending 2023, nearly 40% of active intermediate core bond funds beat their average passive peer (Morningstar, 2024). While not a majority, this rate is substantially higher than for active equity.

Rationale for Active Small-Cap Value

• Market Inefficiency: Small companies often lack analyst coverage and trade with wider spreads. Many are mispriced or have volatile fundamentals that require deeper research.

• • Style Advantage: Value-oriented small caps can offer better entry points for active managers. Broad small-cap indexes tend to hold speculative or unprofitable firms — skilled managers can avoid these and target quality.

• • Empirical Support: Morningstar’s long-term data (2023) shows that over a 10-year horizon, ~36% of active small-cap value funds outperformed — significantly higher than in large-cap. This provides a more favorable landscape for active strategies.

Rationale for Active Large-Cap Growth

• Concentration Risk: Growth indexes like the Russell 1000 Growth are highly concentrated in a few mega-cap tech names. As of mid-2024, over 50% of the index’s weight is in the top 10 holdings, creating a portfolio that behaves more like a concentrated fund than a diversified strategy.

• • Cyclical Opportunity: In years when leadership broadens or top names falter, active managers can outperform. For example, during the 2022–2023 cycle, many active large-growth managers beat their benchmarks by reallocating away from overvalued mega-cap names.

• • Risk Management Benefit: While long-term evidence of outperformance is weaker in this category, the case for active large-cap growth lies in mitigating concentration risk. Active managers may not consistently generate alpha, but they can reduce single-stock exposure and better manage downside volatility. This is particularly important given that large-cap growth is often one of the highest allocations among participants, driven by the familiarity and popularity of big-name tech stocks.

Cost and Fiduciary Considerations

• Fee Discipline: A small annual fee gap — such as between a 0.05% passive index fund and a 0.60% active alternative — can reduce terminal wealth by around 13% over 20 years due to compounding.

• • Fiduciary Process: ERISA requires that fiduciaries act prudently and in participants’ best interests. “A fully passive lineup can meet this standard by offering broad diversification at low cost. However, offering evidence-backed active options in areas with higher inefficiencies can also be prudent—especially when it gives participants an opportunity to enhance returns or offset plan-related fees.

Conclusion

A 401(k) lineup built on passive index funds for full style-box coverage plus a targeted set of active funds in inefficient asset classes offers the best of both worlds: cost efficiency, fiduciary alignment, potential for excess return, and improved risk management.

By combining the reliability of passive investing with selective active management in four time tested categories — international equity, fixed income, small-cap value, and large-cap growth — sponsors can create a modern, research-backed lineup that supports participant success over time.

Are you reviewing your plan’s investment lineup? At Gatewood, we help plan sponsors apply fiduciary standards while building smart, efficient lineups that support long-term participant success.

Sources:

1. Morningstar. Active/Passive Barometer: U.S. Fund Landscape. July 2023.
   https://www.morningstar.com/lp/active-passive-barometer

2. S&P Dow Jones Indices. SPIVA® U.S. Scorecard – Year-End 2023.
   https://www.spglobal.com/spdji/en/research-insights/spiva/

3. U.S. Department of Labor. Employee Retirement Income Security Act of 1974 (ERISA), Section 404(a)(1)(B).
   https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/publications/understanding-retirement-plan-fees-and-expenses

4. Vanguard Research. The Case for Active Management in International Markets. 2022.
   https://advisors.vanguard.com/insights/article/the-case-for-active-management-in-international-markets

5. Morningstar. Why Indexing Works. Morningstar Research Article. 2023.
   https://www.morningstar.com/articles/1132679/why-indexing-works

6. Vanguard. Vanguard Large-Cap Value Index Fund (VVIAX) Prospectus and Fact Sheet. 2024.
   https://investor.vanguard.com/investment-products/mutual-funds/profile/vvifax

7. Morningstar Direct. Intermediate Core Bond Fund Category Performance. Accessed 2024.

8. FTSE Russell. Russell 1000 Growth Index Fact Sheet. 2024.
   https://www.ftserussell.com/products/indices/russell-us

Important Disclosures:

This information was developed as a general guide to educate plan sponsors but is not intended as authoritative guidance or tax or legal advice.  Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.  In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations..

Investing involves risk including loss of principal.  No strategy assures success or protects against loss. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets

Bonds are subject to credit, market, and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

The prices of small cap stocks are generally more volatile than large cap stocks.

The Case for Tariffs (Yes, Really): A Surprising Solution to the Deficit Debate

There’s a glaring contradiction in today’s economic discourse, and it clouds the investment outlook. The loudest voices warning about America’s unsustainable federal deficit are often the most reflexive critics of tariffs, an essential tool that could help address the crisis. They demand “fiscal responsibility” but fall silent when asked what they’d cut from the budget. Suggest entitlement reform, and they’ll tell you it’s political suicide. Propose higher income taxes, and they bristle at the economic drag. Ask how they’d raise $2.0 to $2.8 trillion annually to close the federal budget gap, and the conversation ends.

That’s why tariffs—unfashionable, imperfect, and deeply misunderstood—may be one of the only practical tools left that can meaningfully address the deficit until the country is ready for major changes to how the government collects revenue and spends.

D.O.G.E. Promised a Trillion-Dollar Fix. It Delivered a Rounding Error.

The Department of Government Efficiency (D.O.G.E.) was supposed to be the bold solution to government waste. Originally pitched as a vehicle for cutting $1 trillion in inefficiencies, the agency—backed by Elon Musk and restructured under President Trump—quickly revised expectations downward to $150 billion. D.O.G.E. operates as a consultant would, examining costs and structure and recommending changes to achieve efficiencies across various departments.

D.O.G.E. impact is a subject of some debate.  As of mid-2025, D.O.G.E. has claimed between $150 billion and $ 90 billion in savings, although independent audits dispute much of that figure. More troubling, aggressive cuts to revenue-generating agencies like the IRS reduced government income. By some estimates, DOGE’s efforts may have cost taxpayers $135 billion through re-hires, overtime, legal settlements, and lost tax collections.

While well-intentioned and fundamentally a good idea, the shortfall was a strategic failure that exposed the limits of the “cut spending” approach. D.O.G.E. aimed to trim fat but ended up delivering a rounding error instead of transformational change.

Growth Alone Won’t Save Us

With a less-than-spectacular D.O.G.E. impact, and large Government spending cuts off the table — at least for now — the bipartisan default in Washington has long been to grow the economy and let increased tax receipts shrink the deficit as a percentage of GDP over time. It’s an appealing theory that consistently fails in practice. Despite periods of strong GDP growth, federal spending continues to outpace revenue by unprecedented margins.

While the growth strategy is politically palatable and will help over time, the U.S.’s current fiscal situation, with annual deficits of over $2 trillion, is dire. We don’t have the luxury of waiting for growth to solve a crisis that compounds daily. Growth matters, but it’s not enough. We need substantial revenue, and we need it soon.

Understanding Tariffs: A Tax, Not Inflation

Let’s address the elephant in the room: tariffs are, in fact, a tax. But they are emphatically not inflation.

Inflation is a monetary phenomenon—the expansion of the money supply that dilutes currency value and drives broad-based price increases. Tariffs don’t expand the money supply or devalue the dollar. They are a targeted consumption tax applied to imported goods, with three key differences from domestic taxes:

1. Revenue generation: Unlike inflation, tariffs generate federal government revenue, potentially $300 billion annually
2. Targeted impact: They affect specific imported goods rather than the entire economy.  Imports are roughly 15% of the U.S.’s GDP today.
3. Importer and Corporate absorption possibility:  Who absorbs the cost increase from U.S. tariffs is an interesting and complex question, with the absorbing party differing by item and by importer. With energy costs roughly 10% lower than two years ago, many corporations have absorbed most of the tariff costs rather than passing them through

Despite persistent warnings from economists, tariffs have not triggered the runaway inflation they predicted.

The Hidden Costs of Corporate Absorption

However, when corporations absorb tariff costs, the economic impact doesn’t simply disappear—it gets redistributed. Companies facing compressed profit margins from tariff absorption experience a cascade of effects that ultimately flow back to the broader economy:

Reduced profit margins lead to lower corporate earnings, which translate to decreased stock valuations. This creates a diminished wealth effect as portfolio values decline, prompting consumers to reduce spending. Meanwhile, lower capital gains tax revenue partially offsets the government’s gains in tariff income.

This redistribution means that while tariffs may not be directly reflected in consumer prices, their costs still flow through the economy via financial markets and reduced economic activity.

The Regressive Reality of “Targeted” Impact

While tariffs don’t affect every sector equally, describing their impact as merely “targeted” obscures an important truth: if passed through, they disproportionately burden lower-income households. These families spend a higher percentage of their income on goods (versus services), have less flexibility to substitute away from imported products, and are more price-sensitive to increases in everyday items.

This regressive effect means that tariffs could function as a consumption tax that hits hardest those least able to absorb the cost—a significant trade-off that must be weighed against their revenue-generating potential. Kitchen table economics won 2024 for the Republicans, but it could be the reason they lose the 2026 midterm elections.

Why Income Tax Hikes Hit a Wall

One truism of taxes: Anything you tax, you get less of.  That reflects human behavior and rational economic actors. Raising income taxes sounds straightforward until you encounter the Laffer Curve’s hard ceiling. Beyond a certain point, higher rates reduce total tax revenue by discouraging work, saving, and investment. Historical data suggests we may already be approaching that point, considering total income taxes collected rose when Trump dropped rates in his first administration.

The federal government’s share of GDP rarely exceeds 20%, regardless of marginal tax rates. Taxing productivity has diminishing returns and penalizes the very economic activity we need to encourage. Tariffs, conversely, are harder to avoid and don’t punish domestic output. For revenue generation with minimal collateral damage to productivity, tariffs offer a superior approach, though they come with their own distributional consequences.

Tariffs as Statecraft: Economic Leverage Without Bloodshed

One of tariffs’ most under appreciated benefits is their geopolitical utility. Unlike sanctions or military action, tariffs exert pressure with fewer human costs and less international conflict.

Consider Canada’s Digital Services Tax proposal earlier this year, which targeted U.S. tech firms. The Trump campaign’s swift threat of retaliatory tariffs prompted Canada to reverse course within days. No troops, no diplomatic standoff—just credible economic pressure accomplishing what traditional diplomacy might have taken months to achieve.

In an increasingly multipolar world where military intervention grows costlier and less popular, tariffs represent a powerful, non-violent tool of statecraft.

The Mainstream Economics Blind Spot

The loudest tariff opposition comes from economists who forecasted a Great Depression during COVID, predicted inflation was “transitory,” and missed nearly every major market rebound of the past five years. Now they’re warning of recession if tariffs increase.

Perhaps they’re right this time. But their track record suggests their models are shaped more by ideological assumptions than empirical evidence. As investors and fiduciaries, we must remain disciplined and objective, recognizing that markets rise under both Democratic and Republican administrations because innovation and capitalism transcend partisan politics.

A Nuanced Approach: Targeted Implementation

Smart tariff policy requires acknowledging both benefits and drawbacks. The mainstream economic consensus identifies legitimate concerns: tariffs can raise consumer prices, potentially trigger trade wars, and may reduce competitive pressure on domestic industries.

The solution isn’t to abandon tariffs but to implement them strategically:

Who are the most inelastic exporters? 

What option do they have?  Early returns on inflation and the “Liberation Day” April 2, 2025, tariffs reveal higher government revenues and little to no increased inflation or inflation expectations. This result goes against conventional economic groupthink and needs further exploration. One idea is that exporters where trade deficits are large and long running are “inelastic” and as a result have little recourse but to absorb the tariffs if they wish to continue their export volumes.

Target critical industries:

Focus on sectors vital to national security—steel, defense, critical minerals, and advanced manufacturing—rather than blanket applications that raise consumer costs across the board.  Tariffs have an additional “incentive impact,” where importers may choose to build plants and manufacture in the U.S., thereby avoiding the tariff cost altogether.  This is not a simple calculation for these importers as U.S. production costs could be higher, negating the profitability improvement from moving production to the U.S..

• Use as negotiation tools: Follow the US-China Phase One trade deal model, leveraging tariffs to secure better terms while avoiding long-term economic fallout.
• Maintain policy clarity: Rapid shifts create business uncertainty that kills investment. Clear, consistent policies allow markets to adapt and plan accordingly.
• Match unfair practices: When trading partners engage in dumping or subsidization, targeted tariffs can level the playing field without escalating broader tensions.
• Open new markets to U.S. exporters:  One of the goals of recent tariff policy has been to open up agricultural markets to U.S. exporters, and this could have a beneficial impact on U.S. agricultural producers and exporters.

The Implementation Gap

However, a significant disconnect appears to exist between this strategic approach and current practice. The administration has largely deployed blanket tariffs across broad categories, including items that the U.S. cannot efficiently produce domestically, such as coffee, bananas, and numerous other products. This approach is a shock-and-awe approach to international trade, and if the intent was to draw everyone’s attention to this issue, the approach succeeded.  Unfortunately, this approach creates exactly the problems that strategic implementation could avoid: higher consumer prices on necessities, economic inefficiency from protecting non-strategic industries, and diplomatic tensions without clear negotiating objectives.

This gap between theory and practice undermines many of the arguments in favor of tariffs. The current approach resembles less a surgical instrument and more a blunt tool, impacting the U.S. investment landscape as we saw in the April-May timeframe and making it harder to achieve the revenue and strategic benefits while minimizing economic disruption.

Trump 2.0: Tariffs as Economic Policy

In his first term, Trump deployed tariffs more surgically, targeting China, steel, and automotive sectors. In his second term, tariffs are expected to anchor his economic strategy alongside tax cuts, deregulation, and energy dominance.

The Trump approach may be unpredictable, but it’s not irrational. His focus on significantly altering the terms of U.S. trade across all trading partners can provide near-term economic growth.  The mixed stock market performance that we have seen since April 2 creates a dynamic that appears to be high risk, high reward in terms of effective policy implementation. Tariffs can help the Trump administration achieve its objectives. Trump seeks a legacy of bringing industries back to the U.S., delivering on his promises of higher real wages to blue-collar workers, resulting in a booming economy.  The question is how far he can take this fundamental restructuring of U.S. trade relations without incurring significant international and domestic opposition.,

Markets Recover From Tariff Shocks

History offers a perspective on tariff-related market volatility. In April 2025, markets dropped 19% on tariff news—eerily similar to December 2018’s 19% decline over trade tensions. In both cases, markets recovered as investors recognized the temporary nature of the disruption. Both recoveries were swift once investors had better visibility into the impact and scope of the tariffs on industries and trading partners.

This pattern suggests markets can adapt to tariff policies more readily than economists predict, especially when those policies generate tangible economic benefits. The chart speaks for itself:

I am proud of the Gatewood Investment Committee and its successful navigation of the market correction this year. On the morning of April 7^th, when the market was at its low point for 2025 (easy to see this in hindsight, hard at the time), our CEO said the following to our advisors at our Monday morning all-hands meeting:

“I would keep some powder dry. Since 1957, we’ve had 12 corrections in the S&P 500 greater than 20%. Assuming we’re in a bear market now, half of them were between 20-30%, three were between 30-40%, and another three were greater than 40%. If you have a lot of cash, don’t overcomplicate it. Invest half now, another quarter at a 30% drop, and go all-in, buying everything you can at a greater than 40% drop. You might only get one or two opportunities at that level in your lifetime.”

–Aaron Tuttle CFA® CFP® CLU® ChFC® | Partner | Chief Executive Officer

Since April 7th, the S&P 500 has risen by over +25%. Our clients are the beneficiaries of our continued commitment to long-term, methodical investing on their behalf. That’s the Gatewood way.

The Bottom Line: Tariffs May be the Only Tool We Have Left

We can’t cut our way out of this deficit at least for now, D.O.G.E. proved that. We can’t tax our way out through income taxes—the Laffer Curve won’t allow it. We can’t inflate our way out without destroying the currency. And while growth will certainly help, our fiscal situation requires exploration of all possible revenue sources.

That leaves tariffs as one of our most viable short-term options for meaningful deficit reduction until the country is ready for major changes to how the government collects revenue, what services it provides its citizens, and the cost of those services.

Tariffs have the potential to generate substantial revenue, though with significant distributional consequences. Tariffs create geopolitical leverage. Tariffs can strengthen strategic industries when properly targeted. The impact of tariffs may fall unequally on exporters, importers, nations, and consumers.  They offer a possible path to start closing the deficit before it reaches crisis levels.

The key is honest acknowledgment of their costs and who absorbs these costs: the regressive burden on lower-income households if passed through, the hidden effects of corporate absorption flowing through financial markets, the impact on exporters and importers, and the critical importance of strategic rather than blanket implementation.

You don’t have to love tariffs to recognize their potential impact as a bridge solution until the country is ready for significant changes to how the government collects revenue and spends. At this point, they represent one of the only tools with a credible shot at improving our fiscal trajectory before time runs out, provided we implement them thoughtfully rather than as a blunt instrument.

The deficit is the fire. Tariffs are the hose. But we need to aim carefully, or we risk dousing the wrong things while the real problem continues to burn.

Curious About the Counterpoint?

Read Gatewood CEO Aaron Tuttle’s perspective on why tariffs might distract from the real work of fiscal reform.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Investing involves risk including loss of principal.  No strategy assures success or protects against loss.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

Counterpoints: Tariffs, Temptation, and the Illusion of a Solution

Why solving our fiscal problems requires more than populist revenue

Dan’s recent blog on tariffs sparked great debate—and it’s exactly the kind of back-and-forth that makes Gatewood special. We don’t always agree, but we’re united by a deeper goal: helping clients—and the country—move forward with clarity.

In fact, Dan and I agree on much more than we disagree. We both want fiscal sanity. We both want a more secure, more sovereign America. But where I start to diverge is in how we get there—and more importantly, what costs we may be ignoring along the way.

The Patriotic Appeal

Tariffs have an undeniable surface-level appeal. They feel like we’re standing up for ourselves. They’re visible, easily framed as constitutional, and unlike the income tax, they don’t require the IRS knowing the color of your wallpaper.

For those of us who believe in limited government, sound money, and national sovereignty, tariffs can feel like a clean swap: ditch the bloated tax code, bring back duties on imports, and reignite American industry.

But that’s the illusion. We’re not replacing anything—we’re adding.

If Tariffs Fix It… Why More Debt?

Let’s be honest about the timing. If tariffs were the fix, why did the same legislative push include a $5 trillion hike to the debt ceiling?

Yes, our tax system is bloated and full of misaligned incentives. But changing the source of tax revenue without reducing the need for tax revenue just feeds the same appetite with a different spoon.

Dan—and even the Trump administration, at times—have argued that no one is offering serious spending cuts. But that’s not quite accurate. DOGE is actually an example of a proposed constraint with substantial support, at least among the public.[1]

Likewise, leaders like David Stockman, Rand Paul, and Thomas Massie have consistently proposed concrete spending reductions.[2] Think tanks like the Heritage Foundation have published full spending-cut blueprints—for example, their “Blueprint for Balance” report offers detailed proposals across discretionary and mandatory spending categories.[3] The problem isn’t a lack of ideas—it’s a lack of political will. And when the addiction runs this deep, adding more revenue doesn’t promote sobriety—it just buys more drinks.

As an aside, entitlement reform is where the real fiscal reckoning lies. These off-balance sheet liabilities are rapidly becoming on-balance. Means testing, extending age eligibility, and protecting those already relying on Social Security is likely the responsible, principled path forward. But that requires honesty—and the courage to call these programs what they legally are: welfare benefits.[4]

Tariffs Are Taxes—Let’s Not Pretend Otherwise

We can debate whether tariffs are inflationary (and I tend to agree with Dan: they’re not in the strict monetary sense). But they are a tax. Like all taxes, they distort prices, create inefficiencies, and protect the politically connected.

Tariffs rarely stop at revenue. They become vehicles for cronyism. Industries seek shelter, not strength. Consumers pay more, often unknowingly. The economy shifts—not through innovation, but through manipulation.

We may “win” a few trade skirmishes, and no, this isn’t Smoot-Hawley 2.0. But if our goal is genuine economic progress, tariffs risk lowering our standard of living—especially if they mask the real disease: runaway spending.

What Actually Works

Here’s what history supports:

• Lower and flatter tax codes
• Capital formation and voluntary exchange
• A federal government limited to its essential roles

We’ve seen it repeatedly: prosperity isn’t determined by how you collect revenue, but by how much is taken and how little the market is distorted in the process.

History shows that income taxes, even with rate changes, tend to remain a steady share of GDP—an observation often attributed to Hauser’s Law, which suggests that federal tax revenues rarely exceed 19–20% of GDP regardless of marginal tax rates. This pattern is also supported by Congressional Budget Office (CBO) data over the past several decades.[5] What shifts is who shoulders the burden. And corporate taxes—despite political rhetoric—have declined significantly as a share of overall federal revenue, falling from over 10% in the late 1980s to under 7% in recent years.[6] It’s no wonder Washington is eager to find new tools.

The Real Discipline Test

In theory, tariffs could be a more visible and arguably more constitutional source of revenue—if they were replacing something.

But they’re not. And they won’t. Not without structural reform. Not without Congress giving up its favorite excuse: “We just need more revenue.”

Dan and I agree: America needs to get its fiscal house in order.

But the discipline we need won’t come from patriotic branding or populist packaging.

It will come from restraint. From honesty. And from the courage to say no—not just to foreign imports, but to our own worst habits.

Want to talk about how policy changes might affect your financial plan? Reach out—we’d love to help you navigate it.

Want to hear the other side?

Gatewood’s COO, Dan Goeddel makes the case for tariffs as a practical, if imperfect, fiscal tool. [Explore Dan’s View →]

Family Footnote

Fun fact: I had a family member involved in the Boston Tea Party. Contrary to popular belief, it wasn’t about high taxes. It was about removing a tax that gave British tea a price advantage over American-smuggled tea. The rebellion wasn’t over taxation alone—it was over losing an advantage because of taxation. And some things never change.

[1] Axios. “House passes bipartisan DOGE Act aimed at ending government waste.” https://www.axios.com/2023/11/15/doge-act-house-bill-wasteful-spending

[2] Rand Paul’s “Festivus” Reports, David Stockman’s works like “The Triumph of Politics,” and Thomas Massie’s repeated bills and votes targeting discretionary spending.

[3] Heritage Foundation. “Blueprint for Balance.” https://www.heritage.org/blueprint-balance

[4] I sympathize with those who say, “I paid into the system.” Many were led to believe Social Security was a personal savings or insurance program. But as the Supreme Court confirmed in Flemming v. Nestor (1960), Social Security is a general welfare benefit—not a contractual right. That doesn’t mean we shouldn’t protect those counting on it, but it does mean we need to be honest about the structure going forward.

[5] Congressional Budget Office. “The Long-Term Budget Outlook.” 2023. https://www.cbo.gov/publication/58946

[6] Tax Policy Center. “Corporate Income Tax as a Share of Federal Revenue.” https://www.taxpolicycenter.org/statistics/corporate-income-tax-share-total-revenue

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.

From Job Loss to New Leadership: A Financial Roadmap for Executives in Transition

You never see it coming.

One moment, you’re leading meetings, finalizing strategic plans, preparing for next quarter. The next, you’re sitting in a conference room—or worse, on a video call—hearing words you’ll never forget: “Your role has been eliminated.”

You wonder, “How could this happen to me?”

The first wave is disbelief. The shock is immediate. Then fear. Then the sinking realization: you now have to explain this to your spouse, face your children, and figure out what’s next in a world that suddenly feels unrecognizable.

Take a deep breath.

Job loss—especially at the executive level—can feel like the floor has disappeared beneath you. But it’s also a powerful opportunity to reset, regroup, and rebuild something stronger. With the right plan, this disruption can become a catalyst for transformation – a launchpad for something better.

This roadmap is here to guide you through that process—step by step.

From Free Fall to Flight Plan: An Analogy for the Journey Ahead

Losing a job—especially as an executive—can feel like being suddenly ejected from a jet mid-flight. One moment, you’re moving fast and in control. The next, you’re spiraling through the air with no map, no warning, and no sense of where you’ll land.

It’s disorienting. It’s overwhelming. But just as a pilot turns to their training and mission control during a crisis, you need the right support team to help you stabilize, regain altitude, and chart a new course.

That’s what smart financial planning does during a career transition. It brings structure to the chaos, replaces fear with strategy, and transforms uncertainty into clear next steps.

At Gatewood, we serve as your mission control. We guide you through the turbulence, help you evaluate your options, and design a flight plan for the future. Instead of just surviving the transition, you rise from it—with clarity, lift, and forward momentum.

Avoid Common Mistakes: Lessons From the Field

We’ve worked with many executives through transitions. Here are some of the most common (and costly) missteps we’ve seen:

• Exercising stock options without tax modeling – leading to large, unexpected tax bills.
• Missing plan deadlines – forfeiting non-qualified benefits or accelerated RSU payouts.
• Underestimating liquidity needs – forcing early withdrawals or high-interest borrowing.
• Failing to secure interim insurance – resulting in gaps in medical or life coverage.
• Accepting a new offer based on salary alone – overlooking equity, benefits, or tax structure.

Navigating job loss as an executive isn’t just about making a few quick decisions—it’s about managing a complex web of financial, professional, and personal changes, often under pressure.

The Four Phase Process

That’s why we break the process into four structured phases:

• Triage
• Exploration
• Evaluation
• Integration

Each step is designed to bring order to the chaos, helping you move from immediate uncertainty to long-term clarity. This isn’t just theory—it’s a practical framework that puts you back in control and positions you for what’s next.

This roadmap exists to help you avoid those traps—and make each decision with confidence.

Phase One: Financial Triage & Stabilization

This is your moment of pause—your chance to stabilize and breathe.

Emotions are high, and there are real financial decisions that must be made quickly and carefully. The goal here is control, clarity, and cash flow.

Gatewood’s Role:

Think of Gatewood as your Financial First Responder, bringing calm, clarity, and order when things feel uncertain. We then stay by your side, as your personal CFO, turning crisis into strategy.

We help you prioritize, analyze, and act with purpose—so you’re not making rushed or emotional decisions with long-term consequences. The key steps are as follow:

Evaluate Your Severance Package Thoroughly:

Unpacking your separation agreement helps you avoid missed opportunities and surprises: Is compensation a lump sum or salary continuation?

• What’s the timeline on COBRA, life, and disability insurance?
• Are bonuses, RSUs, or equity awards still payable or forfeited?
• What are your response deadlines—some are within 60–90 days?

Handle Your Retirement Accounts with Intention:

Avoid triggering taxes or penalties by proactively managing your retirement accounts:

• Explore 401(k) rollover options for greater control and investment flexibility.
• Strategically time non-qualified deferred comp distributions.
• Consolidate legacy IRAs or pensions for simplicity and oversight.

Stock Options & Equity Compensation Decisions:

Stock options can become worthless—or cost you more than you gain—if mismanaged:

• Review vesting schedules and expiration dates to avoid forfeiting unexercised stock options.
• Understand the tax treatment differences between ISOs and NSOs, including exposure to AMT and ordinary income tax.
• Model exercise strategies—including early exercise or deferral options—to optimize timing and minimize tax liability.

Cash Flow & Liquidity Management:

Make sure your financial runway is long enough to give you breathing room:

• Inventory current savings, cash reserves, and near-term liabilities.
• Adjust household budget realistically—avoid panic cuts.
• Reassess and align your investment allocation with your new risk profile.

Close the Insurance Gaps:

Losing employer coverage can leave you exposed:

• Compare COBRA, private marketplace, or spousal medical insurance coverage.
• Replace life and disability coverage if lost with employment.
• Consider supplemental coverage if you’re transitioning to self-employment or entrepreneurial efforts.

This phase is about building a financial runway. When done right, it gives you the time and space to thoughtfully plan your next chapter.

Gatewood helps you triage decisions, organize your financial picture, and build a plan that keeps your options open. You’ll walk away from Phase One with a roadmap, not just a list of to-dos.

Phase Two: Exploring What’s Next

Stabilized? Good. Now let’s look forward.

You may not know your next role yet—but that doesn’t mean you can’t plan. In fact, this is the perfect time to explore options and model scenarios that inform your future path.

Whether you plan to rejoin the corporate world, launch your own venture, or pursue consulting, each path requires its own set of decisions and financial assumptions.

What Path Are You Considering?

Each of the following directions carries distinct income variability, tax consequences, and risk dynamics. We help you pressure-test what each would mean for your financial future:

• Traditional Executive Role – Return to a leadership role within a company, often with relocation, equity, or bonus incentives to evaluate.
• Consulting or Contract Work – Offers flexibility and control, but requires planning for fluctuating income, estimated taxes, and benefit self-funding.
• Entrepreneurship or Business Ownership – May offer long-term upside, but involves upfront capital, startup costs, and delayed income potential.

Gatewood Helps You Model and Compare:

• Cash flow under each scenario, including personal runway needs and business funding
• Start-up cost assumptions, including legal setup, equipment, staffing, and marketing
• Self-employment tax implications and retirement plan options (e.g., SEP IRA, Solo 401(k))
• Investment portfolio adjustments to align with your new timeline, risk profile, and liquidity needs
• Tax Strategies for a Lower-Income Year
  • A year of reduced income—especially one following high-earning years—can open unique windows for tax planning. Gatewood helps you capitalize on these opportunities with the goal of long-term tax efficiency:
• Roth IRA Conversions
  • Move pre-tax assets into Roth accounts at lower marginal rates, creating future tax-free income.
• Capital Gain Realization
  • Harvest gains from taxable investments while you’re in a temporarily lower bracket.
• Tax-Loss Harvesting
  • Offset gains with losses to reduce current-year taxable income.
• Donor-Advised Fund (DAF) Contributions
  • Front-load charitable giving while reducing taxable income, especially helpful if severance or bonuses are pushing you into higher brackets.

You don’t need all the answers today. What you need is a partner who can help you navigate uncertainty with confidence— someone to help you weigh the tradeoffs, test your assumptions, and build optionality into your plan.

Gatewood’s Role:

We serve as your strategic thought partner, modeling what-if scenarios and helping you understand how today’s decisions shape your long-term success. You’ll leave Phase Two with a clear understanding of your options—and a plan that grows with your evolving vision.

Phase Three: Evaluating the Next Opportunity

The offers arrives. Now what?

When the right opportunity and new offer come in, it’s time to switch from stabilization to evaluation. This is more than a salary negotiation.

This phase is not just about understanding what’s being offered. It’s about how it fits into your broader financial, professional, and family life goals.

You’ve already created a baseline financial plan during your transition. Now, we integrate the new compensation and benefits package into that plan to evaluate its impact—and identify any gaps, risks, or opportunities.

Evaluating the Offer:

A job offer is more than just salary. We help you analyze:

• Base compensation, bonuses, and performance incentives
• Equity components – RSUs, stock options, and restricted stock
• 401(k) and retirement plan options, including employer match or deferred comp
• Executive benefit packages, such as SERPs, split-dollar life insurance, or fringe benefits
• Relocation packages – including potential tax treatment and reimbursement caps

Key Questions to Consider:

• How does this new package support or fall short of your long-term financial goals?
• What are the tax implications of signing bonuses, equity grants, or deferred comp?
• Is there opportunity for future growth, ownership, or strategic exit?

Gatewood’s Role:

We translate complex offer terms into clear financial implications. By layering the offer into your existing plan, we show you:

• How this offer affects your retirement trajectory
• Whether your liquidity needs are met
• What adjustments may be needed in your investment or tax strategy

Insurance & Risk Considerations:

Many executives overlook the insurance shifts that come with a new role or company. We help you evaluate:

• Medical insurance options – employer plan vs. private coverage
• Life and disability insurance – are your new policies sufficient for your needs?
• Long-term care or supplemental coverages – based on age, wealth, and family considerations

This is about more than accepting a job—it’s about aligning your next chapter with your life vision.

The right role should advance your career and your financial goals. We help make sure it does both.

Phase Four: Long-term Planning & Integration

This is where clarity becomes momentum.

Once you’ve accepted your next role, the real work begins – integrating your new financial life into a long-term strategy that supports your goals, protects your family, and grows your wealth intentionally.

This phase is about moving beyond the transition— it’s time to align every aspect of your financial life with your goals—across investments, tax strategy, risk management, and legacy planning.

Update Your Financial Plan:

Now that compensation is more predictable, we revisit your plan to ensure:

• Cash flow modeling reflects your new income and expenses
• Savings goals are recalibrated for retirement, education, or lifestyle needs
• Tax strategies are aligned with your updated income and equity
• Philanthropic goals are folded into the plan if applicable

Optimize Retirement & Investment Strategies:

Your investment plan must evolve with your life stage and risk profile. We help you:

• Consolidate retirement assets and align allocations with future cash needs
• Evaluate backdoor Roth IRA or mega backdoor 401(k) opportunities
• Coordinate non-qualified plan deferrals with expected distribution years
• Prepare exit strategies for any equity compensation you still hold

Estate, Risk & Legacy Planning:

With a new financial foundation, it’s time to reassess your long-term preservation and legacy goals:

• Review and update your estate documents
• Establish or revise trust structures if needed
• Ensure beneficiary designations match your wishes
• Consider asset preservation strategies for executive-level exposure

Ongoing Review and Accountability:

Life, tax laws, and the economy evolve. We provide:

• Annual reviews to monitor progress toward your goals
• Proactive communication around tax and legislative changes
• Strategic planning around career milestones, liquidity events, or business ventures

This is not the end of your transition—it’s the beginning of a new financial trajectory with clarity and intention.

Bringing It All Together

Losing a job at the executive level isn’t just a career event—it’s a life event. It can feel like free fall, like chaos. But with the right process, it becomes a chance to take stock, pivot wisely, and launch your next chapter from a position of strength.

These four phases—triage, exploration, evaluation, and integration—are designed to bring structure to what feels unstructured. To bring clarity to the chaos. To move you from reaction to strategy.

While this guide offers a framework, it’s not just about having a checklist—it’s about having a partner who helps you make the right decisions, at the right time, for the right reasons.

We’ve helped executives in this moment before. And we can help you, too.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

A plan participant leaving an employer typically has four options (and may engage in a combination of these options): 1. Leave the money in their former employer’s plan, if permitted; 2. Roll over the assets to their new employer’s plan, if one is available and rollovers are permitted; 3. Roll over to an IRA; or 4. Cash out the account value

Financial Planning Before & After a Divorce: A Guide for Women Navigating Life’s Transition

Divorce is one of life’s most emotionally charged and financially complex transitions. Whether you are just beginning to consider it, actively going through the process, or finding your footing after it’s finalized, your financial life will inevitably change. For many women—whether a successful professional or a full-time caregiver to children—this can feel overwhelming, isolating, and uncertain.

At Gatewood Wealth Solutions, we recognize that divorce is not just a financial event—it’s an emotional journey filled with grief, fear, uncertainty, and sometimes betrayal. It affects more than just the couple—it ripples into relationships with children, in-laws, mutual friends, and shared professionals who may now be forced to choose sides.

Trust can be deeply shaken. That’s why our approach is grounded in empathy, discretion, and partnership. We walk with our clients through every stage—supporting them not just as financial advisors, but as steady, compassionate allies in a time of profound change.

This guide outlines the key considerations you need to think through—and the actions you should take—as you navigate this pivotal chapter.

When You’re Considering a Divorce

Before any paperwork is filed, it’s essential to take stock of your situation:

• Understand your financial position: Begin gathering all relevant documents—tax returns, bank and investment statements, insurance policies, loan documents, retirement accounts, and household expenses.
• Assess your lifestyle and spending: What does it cost to live your current life? What expenses may remain or change post-divorce?
• Consider future housing and income needs: Will you stay in the home? Will you need to re-enter the workforce?
• Meet with a financial advisor and attorney confidentially: Even if you aren’t sure you’ll move forward, early professional advice can help you understand your rights, risks, and options.

This stage is about preparation. Quietly gathering information and creating a plan helps protect your interests and gives you space to process what’s ahead emotionally.

Types of Divorces and Their Implications

Understanding the process can help you choose the right path:

• Mediated Divorce: A neutral third-party mediator helps spouses negotiate terms. Often lower in cost and less adversarial.
• Collaborative Divorce: Each spouse has their own attorney, but all commit to resolving without litigation. Additional experts, like financial advisors or therapists, may be involved.
• Litigated Divorce: If cooperation breaks down, the case proceeds to court. This is often the most contentious and expensive route.

The choice impacts your financial, emotional, and relational outcomes. Working with a financial advisor early can help you evaluate settlement options from a long-term planning lens and ensure you’re emotionally supported throughout the process.

Financial, Legal & Emotional Challenges for Women

Whether you’re a professional earning a significant income or a stay-at-home parent managing the household, divorce introduces several issues: 

For Working Professionals:

• Dividing complex assets like equity compensation, business interests, and retirement plans
• Adjusting to new tax liabilities and loss of household income
• Protecting future earnings from excessive support obligations

For Stay-at-Home Mothers:

• Understanding entitlements to spousal or child support
• Re-entering the workforce or seeking training
• Securing long-term financial independence post-divorce

For All Women:

• Creating a new personal budget and financial plan
• Updating wills, trusts, beneficiary designations, and account titling
• Managing emotional trauma, decision fatigue, and shifts in family and social circles
• Navigating loss of shared friendships and community

We understand that many women feel lost in this transition. Trust in others—even professionals—can feel fragile. That’s why working with a firm like Gatewood, where we prioritize empathy, clarity, and transparency, can be a stabilizing force. Our goal is to rebuild your sense of control and confidence in your future.

A financial advisor can act as a steady hand through these transitions, helping ensure nothing falls through the cracks.

The Role of the Financial Advisor in a Divorce

A qualified financial advisor does more than analyze numbers—they provide clarity, structure, and emotional steadiness. They:

• Create financial models to evaluate settlement options
• Project cash flow and retirement viability post-divorce
• Inventory and organize assets and liabilities
• Assist in updating legal documents and insurance policies
• Coordinate with your attorney, CPA, and other relevant professional advisors
• Provide clarity when emotions are high and decisions feel overwhelming

At Gatewood, we are skilled at guiding clients through emotionally sensitive transitions with the care and confidentiality they deserve.

We build comprehensive plans tailored to your new life—empowering you to move forward with confidence.

What Documents Should You Have

• Tax returns (3 years)
• Bank, investment, and retirement account statements
• Pay stubs and income documentation
• Mortgage and debt documents
• Insurance policies (health, life, disability)
• Prenuptial or postnuptial agreements
• Estate planning documents

These help define marital vs. separate property and inform negotiation strategy. Having them prepared gives you a stronger voice in conversations that may feel emotionally loaded.

Evaluating Employee Benefits

Benefits can be an overlooked asset. Make sure to:

• Review health insurance options (COBRA, marketplace, employer coverage)
• Assess pensions, 401(k)’s, RSUs, or stock options
• Understand dependent care benefits or FSA’s
• Clarify ownership or division of group life insurance policies

If you’re covered under your spouse’s benefits, have a plan for transitioning off.

Practical Steps to Take During a Divorce

1. Assemble a professional team: attorney, financial advisor, therapist
2. Open individual bank and credit accounts
3. Track your income and spending
4. Freeze or monitor credit
5. Establish a post-divorce budget
6. Update passwords and secure personal information
7. Review estate plan and insurance needs

We guide clients through each of these so they feel supported and informed—not alone.

 Two Examples of Planning in Action

Case Study 1: Sarah, Corporate Executive

Sarah was a high-earning executive who handled investments but never paid much attention to cash flow. During her divorce, we:

• Modeled child support and alimony scenarios
• Analyzed division of deferred compensation and RSU’s
• Built a post-divorce financial plan that ensured she could maintain her lifestyle and retire on time
• Worked with her attorney to structure settlement payments in a tax-efficient way

Sarah walked away empowered, informed, and with a clear roadmap for her financial future.

Case Study 2: Emily, Stay-at-Home Mom

Emily had been out of the workforce for 15 years, raising her three children. We:

• Helped her inventory marital assets
• Coordinated with her attorney to secure support and long-term housing
• Built a cash flow plan with gradual return-to-work assumptions
• Worked with an estate attorney to update her will and establish a trust for the children

Emily gained financial confidence and clarity, with a plan that gave her options.

A Final Word and Where You Can Turn

Divorce doesn’t have to mean financial confusion or fear. With the right team and the right plan, you can take control of your future, protect what matters, and make empowered decisions.

At Gatewood Wealth Solutions, we specialize in helping women plan through and beyond divorce. Whether you’re just starting to consider it or have finalized it and need help rebuilding, we’re here for you.

Let’s talk. Your next chapter deserves a solid plan.

Important Disclosures
This material was created for educational and informational purposes only and is not intended as tax, legal or investment advice. For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither LPL Financial nor any of its representatives may give legal or tax advice.

This is a hypothetical situation based on real life examples. Names and circumstances have been changed. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or strategies may be appropriate for you, consult your advisor prior to investing.

Legislative Timeline: How the One Big Beautiful Bill Became Law

Read More About How These Legislative Changes Impact High Earners →

[Updated as of 07/09/2025]

On July 7, 2025, the “One Big Beautiful Bill,” a major tax and spending package we’ve been closely tracking, was officially signed into law by the President. We’ve broken down the new changes to help you easily understand how this might affect you, your family, and your financial plans.

What’s in the Final Law?

Permanent Lower Taxes for Individuals

Good news! Lower tax rates and the bigger standard deduction that came from the 2017 tax law (often called the TCJA) are now permanent. This means most people will continue paying less in taxes long-term.

Increased SALT Deduction Cap

If you live in a state with higher taxes, you’ll appreciate this one: The deduction limit for state and local taxes (SALT) has increased from $10,000 to $40,000. However, this benefit phases out if your income is above $500,000.

Special Deductions for Workers and Seniors

• No Federal Tax on Tips and Overtime: Workers who rely on tips or overtime pay won’t pay federal taxes on these earnings between 2025 and 2028, as long as income stays under certain limits ($150K individual/$300K family).
• Extra Deduction for Seniors: If you’re 65 or older, you’ll get an extra deduction ($6,000 if single, $12,000 if married), helping reduce or eliminate taxes on Social Security and other income. This deduction phases out at higher income levels.

Estate Tax Exemption Increase

The exemption for estate taxes is now permanently set at $15 million per person, helping families pass more of their wealth to their heirs without tax penalties.

Good News for Business Owners

• Bonus Depreciation: If you’re investing in your business, you’ll be able to write off 100% of qualifying expenses immediately (from 2025–2029).
• Section 179: Small business owners can now immediately expense up to $2.5 million of equipment, helping with cash flow.
• Research and Development: If your business invests in research, new rules let you write off these expenses more easily through 2029.
• QBI Deduction: The 20% deduction for pass-through business income is now permanent, and it phases out gradually for high earners, rather than disappearing all at once.

Energy and Community Investments

• Clean-energy tax credits are being reduced, but you can still access some incentives for solar and electric vehicles under stricter rules.
• Opportunity Zone investments continue, especially encouraging investment in rural and underserved communities.

Families and Children Benefit Too

• A new “Trump Savings Account” allows families to contribute up to $1,000 per year per child born after 2024, offering tax-friendly growth potential.
• Child tax credits have increased, providing additional support for families.

Social Program Changes

• There are new, stricter work requirements for Medicaid and SNAP (food stamps). While this is intended to encourage employment, it may affect some families negatively.

What Did NOT Pass?

• The corporate tax rate stays at 21%. It was not reduced to 15% as previously proposed.
• The estate tax was not eliminated, just increased significantly.
• Taxes on Social Security benefits were not completely removed, although many seniors will effectively see little to no tax on their benefits due to the senior deduction.

Who Benefits, and Who Might Face Challenges?

Winners:

• Middle-income households due to lower taxes and increased deductions.
• Small and medium-sized business owners with more tax incentives.
• Families who can use the higher estate exemptions.
• Seniors benefiting from additional deductions.
• Families with young children through new savings opportunities.

Those Facing Challenges:

• Higher earners in high-tax states due to limited SALT benefits.
• Consumers and businesses involved in renewable energy due to fewer incentives.
• Lower-income households impacted by stricter Medicaid and SNAP requirements.

We understand that these changes might have mixed impacts depending on your situation. Our priority is making sure you have a clear, easy-to-follow plan.

How Gatewood Wealth Solutions is Here for You

We’re already working to help our clients:

• Understand exactly how these changes impact your unique situation.
• Adjust your strategies to make the most of new opportunities.
• Seek to ensure you’re well-prepared and protected from unintended consequences.

As always, please reach out to us if you have questions or would like personalized advice on navigating these new changes. We’re here to guide you every step of the way.

[Original Article from 06/03/2025]

On May 22, 2025, the U.S. House of Representatives narrowly passed a nearly $4 trillion tax bill known as the “One Big Beautiful Bill” by a 215-214 vote. The legislation includes the most significant tax changes proposed since 2017, including permanent extensions of key provisions from the Tax Cuts and Jobs Act (TCJA), new deductions, and revised rules for both individuals and businesses.

While this is a major step, it is not yet law. The bill now heads to the Senate, where changes are likely. The administration has signaled an interest in seeing legislation finalized by July 4, though many expect the timeline may extend into August or beyond, depending on the pace of negotiations.

Here’s what you need to know — and what we’re doing to help you prepare.

Key Highlights from the House Bill

For Individuals:

• Permanent extension of TCJA provisions, including lower individual tax rates, an expanded standard deduction, and repeal of personal exemptions.
• Increased child tax credit to $2,500 per child for tax years 2025 through 2028.
• Higher SALT deduction cap, raising the limit from $10,000 to $40,000 for households earning under $500,000, with the cap and income threshold indexed by 1% annually through 2033.
• New above-the-line deductions for seniors ($4,000), tip income, overtime pay, and up to $10,000 in U.S. auto loan interest—each subject to income limits.

Estate Planning Updates:

• Increased lifetime exemption for estate, gift, and generation-skipping transfer taxes to $15 million starting in 2026, indexed for inflation. This builds on the existing TCJA levels, which reach nearly $14 million in 2025.

For Business Owners:

• Bonus depreciation restored at 100% for qualifying assets placed in service between 2025 and 2029.
• Section 179 expensing limits increased to $2.5 million, with a $4 million phaseout threshold.
• Domestic R&D expensing reinstated for 2025 through 2029 under a new Section 174A structure.
• Section 199A (Qualified Business Income Deduction):
  • Deduction rate increased from 20% to 23% starting in 2026.
  • Phaseout reform: For service businesses, it expands eligibility and the deduction phases out gradually—reducing by 75 cents for each dollar of income over the threshold—making planning more predictable and makes the deduction permanent. (I removed the comma in this sentence.)
  • Expanded eligibility: Certain dividends from Business Development Companies now qualify for the deduction.
  • Permanence: The deduction is made permanent, ending its previous 2025 sunset.

Other Notables:

• Energy credit repeals and phaseouts: The legislation rolls back tax credits from the Inflation Reduction Act, affecting wind, solar, and battery storage projects, and potentially increasing household energy costs.
• Opportunity Zone extension through 2028, with new incentives for rural investment.
• International and reciprocal taxes, including changes to GILTI, FDII, BEAT, and new retaliatory taxes for countries imposing “unfair” taxes on U.S. firms.
• Medicaid & SNAP Changes: The bill imposes stricter work requirements for Medicaid and the Supplemental Nutrition Assistance Program (SNAP), potentially affecting millions of low-income Americans.
• Introduction of “Trump Savings Accounts”: The bill creates $1,000 “Trump savings accounts” for children born after 2024, offering tax-deferred savings with capital gains tax rates on withdrawals.
• Student Loan Forgiveness Repeal: The legislation repeals student loan forgiveness options under President Biden’s SAVE plan and introduces new repayment plans.
• Defense & Border Security Funding: The bill allocates $150 billion to defense spending and $70 billion to border security, including funding for mass deportations and border infrastructure.

What Happens Next?

The Senate is expected to take up the bill in June, possibly bypassing committee review in favor of direct negotiations. Any significant changes made by the Senate would require another vote in the House before the bill can be enacted. While many core elements of the bill enjoy broad Republican support, there are competing priorities among Senate members — particularly around energy credits, international taxation, and the scope of permanent provisions.

How Gatewood Is Preparing Our Clients

With major tax changes on the horizon and year-end planning season approaching, timing and strategy will be critical. At Gatewood Wealth Solutions, we’re preparing our clients for all possible outcomes — and we’re starting now.

Here’s how we’re helping:

• Running personalized tax scenarios under both current law and the proposed changes, so you can make informed decisions now — not after the fact.
• Identifying strategic opportunities to leverage new deductions, avoid phaseouts, and optimize entity structures and income timing.
• Reviewing estate and business plans to take advantage of proposed changes, including the increased estate exemption and favorable treatment of business investments and income.

You don’t need to wait for the final vote to start planning. Strategic action today can create lasting benefits regardless of how the final bill takes shape.

If you’re ready to review your plan or want to understand how this legislation could impact your financial goals, let’s talk. We’re here to guide you through it — with clarity, strategy, and purpose.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.

Money Considerations When Becoming a Caregiver for Aging Parents

As Americans live longer, more adult children are stepping into a new and emotionally complex role: caregiver for aging parents. While this caregiving journey is often rooted in love and duty, it comes with significant financial, legal, and emotional challenges—many of which families are unprepared to navigate.

At Gatewood Wealth Solutions, we help families prepare for life’s key moments. Becoming a caregiver is one of those moments, and having the right plan in place can help you support your parents without jeopardizing your own financial well-being or confidence.

The Situation Many Couples Face

The typical scenario starts subtly. One parent begins needing help with errands, then medications, then transportation. Eventually, the need grows to include daily support—bathing, dressing, managing bills—or even full-time care.

For couples in their 40s, 50s, or 60s, this can be a difficult balancing act. They may still be working full-time, saving for retirement, or even supporting children in college. When caregiving duties grow, it creates stress, financial strain, and difficult decisions:

• Should one spouse reduce hours or leave work entirely?
• How do we pay for in-home care or assisted living?
• Are we prepared for the legal and medical decisions ahead?
• Will this derail our own retirement?

These are deeply personal—and deeply financial—questions.

Financial Considerations for Caregiving

Caring for a parent can quickly become a financial responsibility. Common costs include:

• Home modifications (ramps, walk-in tubs)
• In-home caregivers or visiting nurses
• Adult daycare programs or respite care
• Transportation services
• Medications, co-pays, or specialized therapies
• Long-term care or assisted living facilities

Medicare Vs. Medicaid: What They Cover (and what they don’t)

Medicare is health insurance primarily for those 65 and older. It covers hospital care, doctor visits, and short-term rehabilitation—but NOT long-term custodial care such as help with bathing, dressing, or eating.

Medicaid, on the other hand, is a needs-based program that can cover long-term care in a facility or at home—but only for individuals with very limited income and assets.

Coordination Between the Two:

In some cases, individuals can qualify for both Medicare and Medicaid (known as “dual eligibility”), but coordinating these benefits is complex and often requires professional guidance. Timing, asset structuring, and proper documentation are key to avoiding disqualification or delays in coverage.

Legal and Estate Planning Issues to Address

When you step into a caregiving role, you also step into a world of legal responsibilities. The following should be reviewed or created:

• Powers of Attorney (Financial & Medical): Ensure someone has legal authority to act on your parent’s behalf.
• Living Will/Advance Directive: Clarifies wishes regarding life-sustaining treatment.
• HIPAA Authorizations: Grants access to medical records.
• Updated Wills and Trusts: Review beneficiary designations, successor trustees, and asset titling.
• Asset Protection Planning: If long-term care may be needed, there are legal strategies to protect family assets within Medicaid’s lookback rules.

Gatewood can work alongside estate attorneys to help ensure the proper legal structures are in place and coordinate with elder law specialists when necessary.

Emotional and Lifestyle Strain

Many caregivers experience:

• Guilt over not doing enough
• Burnout from juggling work, children, and caregiving
• Conflict with siblings or spouses over roles and responsibilities
• Grief as they watch a parent’s health decline

We often remind families: you cannot pour from an empty cup. Planning ahead financially and legally can ease the stress and allow more energy for the emotional and relational aspects of caregiving.

Resources for Caregivers

You’re not alone in this journey. Here are a few reputable resources:

• Area Agencies on Aging (AAA): Local support and information services
  n4a.org
• Eldercare Locator: A free service to connect caregivers with local help
  eldercare.acl.gov
• Family Caregiver Alliance: Tools, education, and support groups
  caregiver.org
• Medicare.gov: Coverage information, providers, and cost estimators
  www.medicare.gov
• Medicaid Planning Resources: State-specific resources available through local elder law attorneys or planning professionals

How Gatewood Can Help

At Gatewood, we guide families through the complexities of caregiving—from financial planning to legal coordination to emotional support strategies. We:

• Model the impact of caregiving expenses on your own retirement plan
• Coordinate with estate attorneys and elder law professionals
• Identify insurance and long-term care funding options
• Help facilitate family conversations and clarify roles
• Help ensure planning stays aligned across generations

A Final Thought

You may never feel fully ready to become a caregiver—but with thoughtful preparation and the right support, you can approach it with confidence, clarity, and compassion.

If you’re facing—or anticipating—the responsibility of caring for an aging parent, let’s have a conversation. We’re here to help you prepare financially and emotionally for one of life’s most important roles.

Important Disclosures:

This material was created for educational and informational purposes only and is not intended as tax, legal or investment advice.  For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither LPL Financial nor any of its representatives may give legal or tax advice.

Gatewood Glide: Asset Allocation by Wealth Stage

Investing isn’t one-size-fits-all. At Gatewood Wealth Solutions, we’ve built a tailored approach—The Gatewood Glide—designed to support investors through each stage of their financial journey, from early accumulation to meaningful legacy-building.

Phase 1: Cultivating – The Habit-Builder

Persona: Early-career professional (entry-level), often single, establishing money habits.

Primary Goals:

• Develop solid financial habits.
• Avoid debt; build credit responsibly.
• Start investing and saving consistently.

Recommended Allocation:

Planning Tips:

• Embrace volatility. You have decades to ride out market fluctuations.
• Prioritize aggressive growth potential (e.g., Total Market Index).
• No fixed income needed yet—keep it simple and growth-oriented.

Phase 2: Building – The Growth-Engine Household

Persona: Dual-income couples, high earners, on track to wealth accumulation.

Primary Goals:

• Maximize contributions to tax-advantaged retirement accounts.
• Fund goals: home purchase, family, education.
• Explore early wealth transfer or entrepreneurial opportunities.

Recommended Allocation:

Planning Tips:

• Continue aggressive accumulation—bonds aren’t beneficial yet.
• Use Roth conversions and prioritize tax advantages.
• Maintain liquidity for near-term goals without sacrificing growth.

Phase 3: Activating – The Glide Begins (10 Years Pre-Retirement)

Persona: Peak-earning years, retirement horizon in sight.

Primary Goals:

• Gradually reduce risk exposure without sacrificing growth.
• Establish liquidity buffers.
• Maintain purchasing power.

Recommended Allocation:

Planning Tips:

• Initiate the Gatewood Glide: gradually shifting equities from ~100% down to ~65% over ten years.
• Bonds and cash to cover initial 5–7 years of retirement spending.
• Consider alternatives based on eligibility and appetite for diversification.
• Align risk tolerance and financial goals clearly—differentiate from traditional target-date funds.

Phase 4: Enjoying – The Confident Retiree

Persona: Retired, financially independent individuals.

Primary Goals:

• Sustain spending comfortably.
• Mitigate sequence-of-returns risk.
• Minimize tax drag and financial anxiety.

Recommended Allocation:

Planning Tips:

• Equities seek to ensure long-term growth, seeking inflation protection.
• Bonds secure spending needs for 5–10 years, offering stability during downturns.
• Alts enhance diversification (private credit, real estate, private equity).
• Tail-risk scenarios (1970s stagflation, 2000s Dotcom) built into strategic planning.

Phase 5: Giving – The Legacy Builder

Persona: Ultra-high-net-worth retirees, philanthropically inclined.

Primary Goals:

• Create lasting legacies through strategic philanthropy.
• Optimize institutional-level investment efficiency.
• Maintain liquidity and simplicity in complex financial environments.

Recommended Allocation:

Planning Tips:

• Aggressively utilize alts if liquidity allows.
• Prioritize tax-efficient giving (Donor-Advised Funds, Charitable Remainder Trusts, foundations).
• Balance preservation, growth, and gifting efficiency carefully.

What Sets Gatewood Glide Apart?

The Gatewood Glidepath significantly diverges from traditional target-date funds. Here’s how:

• Aggressive early equity exposure: Starting nearly fully invested in stocks (98%) seeking to maximize growth early on.
• Higher equity at retirement: Maintains ~70% equity at retirement, significantly higher than the industry average (~50%), seeking to ensure ongoing portfolio growth potential.
• Long-term growth-oriented approach: Treating retirement not as the end of growth, but as the start of a new investment horizon.

Final Thoughts: Why Gatewood Glide Matters

At Gatewood Wealth Solutions, our Glidepath isn’t just about reaching retirement—it’s about confidently soaring through it. By prioritizing growth through higher equity allocations, our goal is to enable our clients not just to retire, but to retire well—maintaining their lifestyles, preserving their purchasing power, and pursuing meaningful legacies.

In short, the Gatewood Glide is designed not just for longevity, but for prosperity.

Because retirement shouldn’t mean slowing down; it should mean continuing your ascent.

Ready to Glide?

Connect with our team to start your personalized journey toward financial clarity and confidence.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk including loss of principal. No strategy assures success or protects against loss.

This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Alternative investments may not be suitable for all investors and should be considered as an investment for the risk capital portion of the investor’s portfolio. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Bonds are subject to availability, change in price, call features and credit risk

The principal value of a target fund is not guaranteed at any time, including at the target date.

Smart Cash Strategies for Today’s Investors

At Gatewood Wealth Solutions, we believe your cash should do more than just sit in a savings account. Whether you need short-term income or are planning for a future large expense, there are smart, managed strategies designed to keep your money working while staying aligned with your financial goals. That’s where our Cash Flow Advisory Strategy and Lump Sum Advisory Strategy come in.

What Are These Strategies?

Both strategies are actively managed cash and cash-equivalent allocations designed with a goal to help clients capture higher short-term yields while maintaining liquidity and stability. However, they serve two distinct purposes:

• Cash Flow Strategy is for ongoing income needs, such as monthly withdrawals in retirement or other recurring distributions.
• Lump Sum Strategy is for specific future expenses, such as a home down payment, tax payments, or a major purchase 6 to 24 months out.

How Do They Work?

Each strategy is structured using a tiered bucket system, with allocations managed by our Investment Committee. The funds are invested in a mix of ultra-short-term, high-quality bond funds and cash equivalents, allowing you to earn a competitive yield while keeping the risk low.

Both strategies use the same four investment buckets but are customized by time horizon and client-specific goals. Here is a breakdown of each bucket and its role within the strategies:

1. Cash Sweep (0–4 months)

• Purpose: Immediate liquidity
• Description: This bucket consists of FDIC-insured cash. It’s fully liquid and used for near-term distributions—typically covering 1 to 2 months of expenses in the Lump Sum Strategy and up to 4 months in the Cash Flow Strategy. This is your most accessible cash, designed to meet known, immediate needs.
• Why We Use It: It protects against the need to sell investments at an inopportune time and ensures quick access to funds.

2. Cash Equivalents (4–15 months) 

• Purpose: Short-term stability with a yield advantage over traditional savings
• Description: This bucket is made up of high-quality, ultra-short-term bonds or money market funds with average maturities under 60 days. These investments aim to maintain a stable $1 value while earning a higher yield than FDIC-insured cash.
• Why We Use It: These instruments are low-risk and highly liquid, making them suitable for short-term needs while delivering higher interest income.

3. Government Duration (10–16 months)

• Purpose: Incremental return potential with modest volatility
• Description: This bucket contains U.S. government bonds with slightly longer maturities. These securities may have minor price fluctuations but offer a yield advantage when the interest rate outlook justifies extending duration.
• Why We Use It: When interest rates are expected to fall or stabilize, this bucket helps add return without taking on credit risk. We may hold this bucket selectively depending on the market environment.

4. Credit (16–24 months)

• Purpose: Higher return potential for mid-term needs
• Description: This bucket includes short-term corporate bonds. These offer higher yields than government securities but also carry credit risk. When credit spreads are attractive, this bucket adds value. When spreads are tight, as they are currently, we avoid this allocation.
• Why We Use It: When appropriately timed, it enhances returns without overextending risk. It is used only when the risk-reward tradeoff is favorable.

Here’s a simplified breakdown:

Making It Simple: A Helpful Analogy

To make the distinction even clearer, think of these two strategies like packing for a trip:

• The Cash Flow Strategy is your carry-on bag—it holds everything you need right away: monthly withdrawals, bills, and short-term expenses. It’s always close, easy to access, and organized to support your daily needs without touching your long-term investments.
• The Lump Sum Strategy is your checked luggage—it’s packed for something coming up later in the journey. Maybe it’s a major purchase, a home remodel, or another large one-time expense. You don’t need it today, but it needs to be ready when the time comes.

Both “bags” are thoughtfully packed to serve a specific purpose. By separating your short-term needs from your near-future plans, you avoid overloading your portfolio with cash—or worse, being forced to sell long-term investments at the wrong time.

When Is Each Strategy Appropriate?

• Use the Cash Flow Strategy if you:
  • Are taking monthly or quarterly withdrawals
  • Are in retirement and need predictable income
  • Want to insulate your investment portfolio from market-driven withdrawals

• Use the Lump Sum Strategy if you:
  • Have a known upcoming expense in 6–24 months
  • Are saving for a home, wedding, remodel, or other large goal
  • Don’t want to leave the money in a low-yield bank account but also don’t want the risk of the market

Cash Hub vs. Planning for the Future

The Cash Hub is part of our broader retirement income strategy. It represents a specific number of months’ worth of expenses we recommend keeping liquid to avoid selling long-term investments during downturns. For many retirees, we target 18 to 24 months of non-covered expenses in cash, creating a buffer for down markets.

The Lump Sum Strategy, on the other hand, is designed for one-time planned needs. Rather than letting those dollars sit idle in a checking account or risk losing value to inflation, we position the funds in a stable, managed solution.

Example: How a Client Might Use Both

Meet Sarah, age 62, recently retired. She has:

• $140,000 in cash from a recent bonus and stock option payout
• Monthly expenses of $10,000
• Social Security and a pension covering $6,000 per month

Her Plan: 

• $96,000 goes to her Cash Flow Strategy (24 months of net cash needs: $10,000 – $6,000 = $4,000 × 24)
• $30,000 goes to her Lump Sum Strategy for a kitchen remodel in 18 months
• The rest stays in her investment portfolio for long-term growth potential

This allows Sarah to keep her distributions steady, avoid selling stocks in a downturn, and earn more on her near-term funds than she would at the bank.

Why Not Just Use a Savings Account or CD?

While savings accounts and CD’s offer less volatility, they fall short in three key areas:

• Low yields: Even high-yield savings accounts often return less than our managed strategies
• Inflexibility: CD’s lock your money for a set term, which may not align with your needs
• No strategy: Bank accounts are static. Our strategies are actively managed based on interest rates and your goals

That said, it’s important to note: unlike bank accounts, these funds must be sold before cash becomes available. However, the process is simple and only takes 1–2 business days to settle, and we handle the logistics for you.

Bottom Line: Purpose-Driven Cash Management

Your short-term cash shouldn’t be an afterthought. With thoughtful planning, strategic allocation, and active oversight, your money can stay accessible, and productive.

If you’re holding significant cash in the bank or unsure how to structure your liquidity, let’s talk about how these strategies can work for you.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk including loss of principal.  No strategy assures success or protects against loss

Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.

CDs are FDIC insured to specific limits and offer a fixed rate of return if held to maturity, whereas investing in securities is subject to market risk including loss of principal.

An investment in the Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible  to lose money by investing in the Fund.

This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing

From Firm to Family: Why Your Financial Plan Deserves a Team

At Gatewood Wealth Solutions, wealth management extends beyond mere numbers—it’s about relationships, trust, and commitment that span generations. Our distinctive Firm-to-Family model isn’t just a slogan; it’s the foundation of how we deliver lasting value across generations.

A Team Built Around You

Unlike traditional models where clients are tethered to a single advisor, Gatewood provides an integrated team of professionals, each with a specific role:

• Wealth Advisor: Your primary relationship manager, guiding significant financial decisions and ensuring your overall experience is seamless and attentive.
• Wealth Planner: A Certified Financial Planner® responsible for crafting and continuously refining your personalized financial plan, directly aligned with your life goals.
• Wealth Coordinator: The organizational anchor who manages administrative details, keeping your financial matters consistently organized and accessible.
• Specialists: Extra support for your plan from experienced teammates with deep understanding of specialized and complex topics.

Expertise That Grows with You

Beyond the core Client Care Team, we have a team of specialists in investments, tax, business, and estate planning. These professionals collaborate behind the scenes to address the complexities that come with growing wealth.

Whether you’re navigating a liquidity event, transitioning into retirement, or preparing your estate plan, our in-house specialists at Gatewood team are already in place—ready to step in and support you. No matter your life stage or estate size, the right expertise is readily available.

This approach helps keep your financial strategy on track through life’s transitions and unexpected turns—so you can move forward with greater clarity and confidence.

Tailored Services for Every Stage

We recognize the uniqueness of each client’s financial landscape. Our Client Care Teams are structured to reflect your specific financial complexity:

• Private Client Care: For ultra-high-net-worth individuals with complex, multifaceted financial needs.
• Client Care Plus: Designed to support high-net-worth families requiring comprehensive, strategic financial management.
• Client Care: Catering to clients with essential, yet crucial, financial planning needs.

By aligning our teams precisely with your financial circumstances, we ensure focused attention and optimal outcomes at every life stage.

The Firm-to-Family Advantage

Our Firm-to-Family approach means your relationship extends to the entire firm rather than depending solely on an individual advisor. This method provides:

• Consistency: Your financial strategy remains stable and continuous, even if team members evolve.
• Comprehensive Expertise: Immediate access to a collective wealth of knowledge from professionals who collaborate to serve your best interests.
• Generational Relationships: We aim not just to serve you, but to support your family’s financial health across multiple generations, establishing a legacy of security and growth.

How We Differ from Traditional Advisors

Many wealth management firms operate on a “book of business” or “my client” model, where clients rely exclusively on one advisor for their financial planning. The advisor may fly under the banner of a big national brand, but in reality, that advisor acts as a one-man band.

This traditional approach can create vulnerabilities, particularly if the advisor moves firms, retires, or experiences life changes. At Gatewood Wealth Solutions, we embrace an “our clients” culture, ensuring your relationship is with our entire firm. This commitment means you enjoy seamless continuity, collective expertise, and personalized attention from our dedicated team, free from the disruptions often associated with traditional, advisor-dependent models.

Real Stories, Lasting Impact

Clients frequently highlight the tangible benefits of our comprehensive approach:

“Our relationship with Gatewood Wealth Solutions has evolved over the years right along with our family. From building and protecting our wealth to retirement and estate planning, Gatewood has guided us and enabled our objectives. It’s reassuring to know skilled professionals we trust are working with us to optimize what we have worked for all our lives¹.” — Dr. Boyd C., Retired Corporate Executive

A Client Story: The Parkers’ Journey from Overwhelmed to Empowered

Before partnering with Gatewood, the Parker family—two busy professionals with three children and aging parents—felt stretched thin. Despite solid earnings, they were unsure how to balance college savings, retirement planning, elder care responsibilities, and managing their growing portfolio. Their previous advisor provided only occasional updates and general guidance, leaving them uncertain and reactive.

After engaging Gatewood Wealth Solutions, everything changed. They were introduced to their dedicated Client Care Team, including a Wealth Advisor who listened closely to their goals, a Wealth Planner who developed a dynamic, goal-driven plan, and a Wealth Coordinator who ensured nothing slipped through the cracks.

Behind the scenes, Gatewood’s investment, tax, and estate planning specialists collaborated to build a coordinated strategy. The Parkers refinanced underperforming real estate assets, implemented a multigenerational gifting strategy, optimized their retirement drawdown plan, and established an education trust for their children.

Today, the Parkers say they finally feel in control. They’re no longer juggling disconnected advice—they have a proactive team that meets with them regularly, answers questions before they even arise, and helps them make confident decisions.

Ready to Experience the Gatewood Difference?

If you seek a wealth management relationship built on enduring trust, tailored strategies, and a dedicated team focused on your family’s lasting financial success, we’re ready to start the conversation.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities may be required to effect some of the strategies. Investing involves risks including possible loss of principal.

¹ This statement is a testimonial by a client of the financial professional as of 11/13/2023. The client has not been paid or received any other compensation for making these statements. As a result, the client does not receive any material incentives or benefits for providing the testimonial. These views may not be representative of the views of other clients and are not indicative of future performance or success.

There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification and asset allocation do not protect against market risk.

The information provided here is general in nature. It is not intended, nor should it be construed, as legal or tax advice.  To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.

Expertise That Grows with You

Beyond the core Client Care Team, we have a team of specialists in investments, tax, business, and estate planning. These professionals collaborate behind the scenes to address the complexities that come with growing wealth.

Whether you’re navigating a liquidity event, transitioning into retirement, or preparing your estate plan, our in-house specialists at Gatewood team are already in place—ready to step in and support you. No matter your life stage or estate size, the right expertise is readily available.

This approach helps keep your financial strategy on track through life’s transitions and unexpected turns—so you can move forward with greater clarity and confidence.

Tailored Services for Every Stage

We recognize the uniqueness of each client’s financial landscape. Our Client Care Teams are structured to reflect your specific financial complexity:

• Private Client Care: For ultra-high-net-worth individuals with complex, multifaceted financial needs.
• Client Care Plus: Designed to support high-net-worth families requiring comprehensive, strategic financial management.
• Client Care: Catering to clients with essential, yet crucial, financial planning needs.

By aligning our teams precisely with your financial circumstances, we ensure focused attention and optimal outcomes at every life stage.

The Firm-to-Family Advantage

Our Firm-to-Family approach means your relationship extends to the entire firm rather than depending solely on an individual advisor. This method provides:

• Consistency: Your financial strategy remains stable and continuous, even if team members evolve.
• Comprehensive Expertise: Immediate access to a collective wealth of knowledge from professionals who collaborate to serve your best interests.
• Generational Relationships: We aim not just to serve you, but to support your family’s financial health across multiple generations, establishing a legacy of security and growth.

How We Differ from Traditional Advisors

Many wealth management firms operate on a “book of business” or “my client” model, where clients rely exclusively on one advisor for their financial planning. The advisor may fly under the banner of a big national brand, but in reality, that advisor acts as a one-man band.

This traditional approach can create vulnerabilities, particularly if the advisor moves firms, retires, or experiences life changes. At Gatewood Wealth Solutions, we embrace an “our clients” culture, ensuring your relationship is with our entire firm. This commitment means you enjoy seamless continuity, collective expertise, and personalized attention from our dedicated team, free from the disruptions often associated with traditional, advisor-dependent models.

Real Stories, Lasting Impact

Clients frequently highlight the tangible benefits of our comprehensive approach:

“Our relationship with Gatewood Wealth Solutions has evolved over the years right along with our family. From building and protecting our wealth to retirement and estate planning, Gatewood has guided us and enabled our objectives. It’s reassuring to know skilled professionals we trust are working with us to optimize what we have worked for all our lives¹.” — Dr. Boyd C., Retired Corporate Executive

A Client Story: The Parkers’ Journey from Overwhelmed to Empowered

Before partnering with Gatewood, the Parker family—two busy professionals with three children and aging parents—felt stretched thin. Despite solid earnings, they were unsure how to balance college savings, retirement planning, elder care responsibilities, and managing their growing portfolio. Their previous advisor provided only occasional updates and general guidance, leaving them uncertain and reactive.

After engaging Gatewood Wealth Solutions, everything changed. They were introduced to their dedicated Client Care Team, including a Wealth Advisor who listened closely to their goals, a Wealth Planner who developed a dynamic, goal-driven plan, and a Wealth Coordinator who ensured nothing slipped through the cracks.

Behind the scenes, Gatewood’s investment, tax, and estate planning specialists collaborated to build a coordinated strategy. The Parkers refinanced underperforming real estate assets, implemented a multigenerational gifting strategy, optimized their retirement drawdown plan, and established an education trust for their children.

Today, the Parkers say they finally feel in control. They’re no longer juggling disconnected advice—they have a proactive team that meets with them regularly, answers questions before they even arise, and helps them make confident decisions.

Ready to Experience the Gatewood Difference?

If you seek a wealth management relationship built on enduring trust, tailored strategies, and a dedicated team focused on your family’s lasting financial success, we’re ready to start the conversation.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities may be required to effect some of the strategies. Investing involves risks including possible loss of principal.

¹ This statement is a testimonial by a client of the financial professional as of 11/13/2023. The client has not been paid or received any other compensation for making these statements. As a result, the client does not receive any material incentives or benefits for providing the testimonial. These views may not be representative of the views of other clients and are not indicative of future performance or success.

There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification and asset allocation do not protect against market risk.

The information provided here is general in nature. It is not intended, nor should it be construed, as legal or tax advice.  To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.

How One Business Owner Saved Over $12K by Electing S-Corp Status

When Mike started his consulting business, he did what many new entrepreneurs do—he operated as a sole proprietor. It was simple, required no formal setup, and allowed him to focus on building his client base.

But two years in, with business booming and $200,000 in net income on the books, Mike’s CPA asked a pivotal question:

“Have you thought about electing to be taxed as an S-corporation?”

Mike had heard the term before but didn’t quite understand how it worked—or why it mattered. What followed was an analysis that changed the way Mike ran his business and saved him thousands of dollars every year.

The Tax Breakdown: Sole Proprietor vs. S-Corp

As a sole proprietor, Mike was paying self-employment tax on every dollar of his $200,000 net income. That meant:

• Sole Proprietor Self-Employment Tax:
  $200,000 × 15.3% (Social Security + Medicare) = $30,600

Ouch.

But under an S-Corp structure, things look different. Mike would pay himself a reasonable salary (let’s say $96,000) and take the rest of the profit ($104,000) as a distribution, which isn’t subject to self-employment taxes.

Here’s how the S-Corp scenario plays out:

• S-Corp Employment Tax on Salary:
  $96,000 × 15.3% = $14,688
• Remaining $104,000 in profit is not subject to employment tax.
• Tax Savings:
  $30,600 (Sole Proprietor) – $14,688 (S-Corp) = $15,912 saved

The Cost of Making the Switch

Of course, S-corporation status comes with a few additional administrative requirements:

Even after subtracting these estimated costs, Mike stood to save between $12,212 and $14,212 per year.

Bonus Tax Benefit: State Income Tax Deduction

But that’s not all. Because S-corps are pass-through entities, Mike also became eligible for Missouri’s pass-through entity tax election, allowing state taxes to be paid at the business level—rather than being limited to the $10,000 SALT deduction cap on his personal return.

This strategy gave Mike additional federal tax savings, since he could now fully deduct state taxes paid by the S-corp.

Other Advantages of Being an S-Corporation

Beyond tax savings, Mike discovered several practical and strategic benefits:

• Professionalism: Operating as an S-Corp signaled to clients and vendors that his business was established and credible.
• Liability Protection: As an LLC electing S-Corp status, he gained legal separation between personal and business assets.
• Retirement Contributions: With W-2 wages, Mike could contribute more to certain retirement plans (like a solo 401(k)).
• Ownership Flexibility: He could bring on other shareholders or investors without reworking the business structure.
• Improved Bookkeeping Discipline: Payroll, regular compensation, and distributions helped him create clearer financial records—critical for future growth or financing.

Additional Considerations When Converting to an S-Corporation

Fringe Benefits May Be Less Favorable
S-corporation owners who hold more than 2% of the company are treated differently than sole proprietors or C-corporation owners when it comes to fringe benefits.

• For example, health insurance premiums must be included in the shareholder’s W-2 wages and deducted on their individual return—not the business return.
• This approach does not reduce FICA taxes and can limit the overall tax benefit.
• The same applies to HSA contributions and certain other fringe benefits, which may not be deductible at the entity level.

Reasonable Compensation Is Required

The IRS requires that S-Corp shareholder-employees pay themselves a reasonable wage before taking distributions. This is a common IRS audit focus.

Tip: A reasonable salary should be based on industry standards, the services performed, and the time spent working in the business. In our earlier example, $96,000 appears reasonable—but this figure should be justified and documented.

State Tax Workaround – SALT Cap (PTE Election)

Some states, including Missouri, allow Pass-Through Entity (PTE) tax elections, which can help bypass the federal $10,000 cap on state and local tax (SALT) deductions.

However, this strategy comes with caveats:

• The election must be made annually and on time.
• It isn’t always beneficial, depending on whether you itemize deductions and your income level.
• Not all states allow this workaround, so consult your tax advisor to see if it applies.

Tracking Basis and Distribution Rules

S-Corp shareholders must carefully track their basis (i.e., their investment in the company).

• Distributions in excess of basis are taxable.
• Losses may be disallowed if the shareholder doesn’t have enough basis to absorb them. This becomes more complex if the business has significant debt, inventory, or variable income.

Timeline for Electing S-Corp Status

To be effective for the current tax year, you must file Form 2553 by March 15.

• If you miss the deadline, you may still qualify for late election relief, but you’ll need to follow IRS procedures.

Exit Strategy and Flexibility

S-Corp status is relatively easy to revoke if your situation changes. However, once revoked, you generally cannot re-elect S-Corp status for five years without IRS approval.

Bottom Line: Is It Time to Make the Switch?

For Mike, the math was simple: Save over $12,000 a year, protect personal assets, and run a more structured, scalable business.

If you’re earning over $50,000–$60,000 in annual net income, talk to your CPA or financial advisor about whether electing S-Corp status could be right for you. With the right structure and planning, you may save thousands each year in taxes—while building a more scalable and protected business. For many small business owners, this single decision can meaningfully boost profitability and financial efficiency—without changing the work you do.

Want to explore whether switching to an S-Corp could save you thousands too? Let’s talk.

Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.

This is a hypothetical example and is not representative of any specific situation. Your results will vary.

What Happens in Your House Is More Important Than the White House

Tariffs. Tax policy. Trump.

Turn on the news and you’ll be flooded with political noise—but let’s cut through the clutter:

What matters most to your family’s financial future isn’t in Washington, D.C.—it’s within your own four walls.

At Gatewood, we help families shift their focus away from the headlines they can’t control and toward the household habits they can. While income tends to steal the spotlight, spending is the real unsung hero of long-term financial independence. Most financial advisors avoid talking about spending—it can feel too personal, too awkward. They fear upsetting clients by confronting sensitive realities. But not us. We believe in honest conversations because financial discipline today lays the foundation for your family’s future freedom.

Understanding the Budgeting Landscape

Clients often ask us: “How much should I spend on housing?” or “Am I saving enough?”

To help answer these, here’s a comparison of how three well-known frameworks—Dave Ramsey, the CFP Board, and CFA-informed guidance—stack up:

Key Differences:

• Dave Ramsey: Strict, debt-focused with a heavy emphasis on giving and zero-based budgeting
• CFP Board: Offers guardrails with room to personalize
• CFA-Informed: Focuses on principles like discipline, long-term growth, and risk alignment (Ex: Budgeting isn’t about rigid rules—it’s about aligning your resources with your values, goals, and risk tolerance.)

The Gatewood Family Budgeting Guidelines

At Gatewood, we synthesized the best of all approaches and added real-life insight. Here’s our proprietary guide we call The Gatewood Family Budgeting Guidelines:

A Look Inside Our Home: My Family’s Budget Case Study

We don’t just preach these principles—we live them. Here’s a transparent look at how my family’s real monthly spending lines up with our own guidelines (below). These figures are after our 401(k) and HSA contributions are maximized. As you will see, the Goeddel family is far from perfect! I hope sharing this information and being vulnerable is helpful to you and your family.

A Few Highlights

Where We’re Winning

• Mortgage is our only debt
• Long-term savings and insurance plans are in place

Where We’re Improving

• Reducing “Entertainment & Personal” (Amazon!!!) and “Miscellaneous”
• Increasing savings beyond the 401(k) closer to 20%

Take Control of Your Financial Future

Financial freedom isn’t found in the headlines—it’s built through intentional habits, month after month. At Gatewood, we help families match their money with their values—so they can create meaningful wealth and lasting legacies.

Ready to align your budget with your future? Let’s talk. We’re here to help.