By Thomas Ruggie, published November 10, 2023

With the IRS focusing more on high-net-worth taxpayers, is it time for business owners to consider implementing cash balance plans?

High-current-income business owners can’t afford to sit still with the IRS loading up its audit and IT staff to drive federal tax revenue. Cash benefits plans can help lower tax burdens and build a more affluent retirement and are worth investigating.

As the IRS grows more aggressive with high-net-worth taxpayers — even announcing it’s deploying artificial intelligence audit tools in its pursuit of additional federal revenue — successful business owners need proactive tax strategies that offer big benefits.

One of the most underutilized approaches is also one of the most powerful: cash balance plans, which create the opportunity for both big deductions and big retirement savings.

What are cash balance plans?

Cash balance plans, sometimes referred to as cash balance pension plans, have elements similar to certain other pension and defined benefits plans. They’re more complex to set up and administer than a standard 401(k), so relatively few advisers fully grasp their implications and benefits.

The U.S. Department of Labor offers a fact sheet on the complex plans, which were created under the federal Employee Retirement Income Security Act (ERISA). The plans come with some regulatory and oversight burdens, as the Department of Labor, the EEOC and the IRS all have roles in the plans’ oversight.

But don’t let the regulatory regime scare you. The premise of cash balance plans is relatively simple. It’s essentially a hybrid pension plan that offers significant benefits to the owner and potentially to other highly compensated people in the company’s management structure.

Who are cash balance plans best for?

The best candidates for cash balance plans are mature businesses with forecasted sustainable profits and a stable number of employees on their books. Cash balance plans require businesses to sign off on putting away a significant amount of money on a perpetual basis, limiting the amount of money businesses have to reinvest in themselves.

But if your business can do that, the deductions are excellent, and the rate of savings accumulation can be terrific.

What’s the benefit of a cash balance plan?

In a traditional 401(k) defined contribution plan, individuals and businesses calculate a contribution amount for themselves that they can afford today. Based on their current salary, lifestyle and 401(k) contribution limits, individuals determine the amount of money they want to contribute to their plan. It’s a straightforward calculation for individuals and their accountants.

Cash balance plans have a significantly higher contribution limit and more flexible time commitments. For individuals with multiple income streams, they also offer the ability to shelter additional income, then roll up those funds into an IRA at the end of the plan.

CBPs also allow for complete freedom for the underlying investment, meaning the individual can decide how it’s structured and who it’s structured with. Investors have access to traditional bonds, stocks, mutual funds, as well as alternative investments. In some cases, it may even be possible to have life insurance funded inside of the plan, effectively paying for insurance on a tax-deductible basis.

Conversely, cash balance plans depend on more in-depth and complex calculations. Rather than defining what you can contribute today, cash balance plans are based on a statistical calculation that factors in age, target retirement benefit and target retirement age. The contribution amount is predetermined based on an actuarial assumption and can differ year to year within a set range.

What are the drawbacks?

First, the complexities make it a less utilized tool, and there are moderate expenses to create and administer it. Second, because it’s less well known and less frequently used than other kinds of tax strategies and retirement plans, there are fewer well-versed cash benefit plan advisers. Check with your financial adviser, CPA or tax attorney, and if they don’t know what they’re doing, you’ll need to find someone who does. Most screening can be done by answering a few simple questions about your business and our employees.

Additionally, unlike a 401(k) — for which almost everyone is a prime candidate — the mandated contribution rate of a cash balance plan means that only individuals with a specific income flow are good candidates. In a cash balance plan, consistency is key. Individuals who are thinking of starting cash balance plans for their companies need to be sure that they have the long-term qualities needed to continue to fund these plans.

And for growing companies that eat cash for breakfast, lunch and dinner, cash balance plans provide too little flexibility, both in terms of available capital, as well as for employee growth; the majority of businesses that utilize cash balance plans have less than 100 employees. Businesses with cash balance plans need to be able to contribute the designated amount, even with variation from year to year.

Watch a portion of Tom’s presentation

Tom Ruggie, ChFC®, CFP®,  Founder and CEO of Destiny Family Office, presented on the ‘Management of Collectibles in Wealth Portfolios’ to participants at the Daniel Frank Sedwick LLC  Treasure Auction 34, held recently in Winter Park, FL.

By Thomas Ruggie, CHFC®, CFP®
Published on Kiplinger, July 9, 2023

Many of the most valuable vintage photos are sports-related, and limited supply and high demand, as well as careful and trusted authentication, are key.

With global financial markets sliding sideways, visionary investors are on the lookout for new asset classes. One tangible subclass you can actually see with your eyes is worth checking out: vintage photos.

Fine art pieces have long been found in the portfolios of high-net-worth individuals and institutions — and even pooled, in recent years, and turned into quasi-securities. The unique digital images known as NFTs (non-fungible tokens) were a massive craze-turned-crash.

Vintage photographs occupy a different space, more closely adjacent to the world of rare collectibles. Many of the most valuable vintage photos are sports-related: In 2020, a 110-year-old photo of legendary baseball player Ty Cobb sold for an eye-popping $390,000. Auction houses like Robert Edward, Heritage, Lelands and even eBay routinely facilitate trades of images for tens of thousands of dollars each.

As with collectibles like sports trading cards and autographs, the key to value in vintage photographs is not only limited supply and high demand but careful and trusted authentication. Investment-grade vintage photographs tend to be authenticated by one of a handful of well-known firms, such as PSA (where Mark Cuban and Kevin Durant are significant investors).

PSA was also instrumental in the creation of a system for grading vintage photographs that has become the market standard. Photos are classified as being one of four types, based on proximity to the original negative. Types III and IV, the least valuable, are produced from duplicate negatives. Type II photos come from the original negative but were made two or more years after the photo was taken. Type I photos are printed from the original negative within two years of the original event.

Most or all investment-grade vintage are either Type I or Type II photos. The $390,000 Cobb image was judged to be a Type I photo, taken and developed on the same day (July 23, 1910) by a known photographer, Charles Conlon of the New York Evening Telegram).

As with all forms of art, the value of a vintage photograph has a subjective element that is dependent on the content and composition of the image itself. Original photos of timeless celebrities will always have value, even if they aren’t particularly vintage. A 1993 print of British model Kate Moss by fashion photographer Albert Watson sold for $25,000 in 2017.

But in a world that is now and will forever be awash in cheap digital content, all types of high-grade vintage photographs have the power to hold collectors’ and investors’ attention.

In line with fine art and collectibles, a driving force in the vintage photo market is a community of passionate enthusiasts and connoisseurs who find satisfaction in owning rare things of beauty or historical significance. But vintage photos have also drawn an increasing number of investors primarily interested in financial return and diversification.

As for how investors can access this market, there’s no single or simple answer, but the more reputable auction houses and well-known dealers are good places to start.

Even for those with a passion for collecting will want to limit asset subclasses like vintage photos to 10% or so of your overall portfolio. (I’m a sports memorabilia collector, and my collection, acquired over several decades, hovers around this mark in mine.)

It’s also good to remember that these aren’t necessarily highly liquid assets and that they’re better suited to longer holding periods. Within your portfolio, I think it’s useful to think in terms of three pools: one up to 10 years, one from 11 to 20 years and a third that’s 20-plus years. All tangible collectible assets should go into the latter two pools.

This also means that serious investors/collectors will have a mindset of buying during market downturns, just as with financial assets. But while collectibles markets will soften during financial downturns, such assets can be surprisingly non-correlated to other markets, in particular the stock market. That’s a useful feature for wealth management planning and may be particularly relevant if today’s sideways trend continues.

The many disruptions on the horizon for our AI-infused world may help stoke the deep-rooted human longing for tangible assets and simpler moments. Together, I see those factors continuing to drive the market for vintage photographs. That means some pictures will be worth not only a thousand words, but tens or hundreds of thousands of dollars.

This prestigious ranking, announced April 26, was the first of its kind awarded by USA Today and Statista Inc., the world-leading statistics portal and industry-ranking provider.

USA Today and Statista selected the Best Financial Advisory Firms 2023 based on two dimensions: recommendations by clients and peers and a firm’s growth of Assets under Management (AUM). The recommendations were collected via an independent survey sent to over 20,000 individuals. The development of AUM was analyzed both short and long-term based on publicly available data. In the consideration for the top 500 RIA firms, recommendations had a weight of 20% while development of AUM had a weight of 80% (short-term and long-term growth were equally weighted) to derive the final score.

Read this interview by David Zax, a freelance financial reporter whose work has appeared in Bloomberg CityLab, Entrepreneur Magazine, Fast Company and The New York Times.

Published Feb. 15, 2023

Crain Currency

Tom Ruggie’s 31-year career spans managing wealth both for standard investors and ultra-high-net-worth clients. Since founding Florida-based Destiny Family Office in 2015, his focus has been increasingly on the latter. He spoke with Crain Currency about the excitement of having entrepreneurial clients and how working with ultra-high-net-worth individuals grants access to the “upper stratosphere” of the investment world.

Why do you especially like working with the 13 clients of your multifamily office? 

They’re entrepreneurial. Most are either currently entrepreneurial, or the wealth came from entrepreneurship. Candidly, I’m probably not a good fit for G5-type wealth [i.e. inherited fifth-generation wealth]. What resonates with me is working with people that are like me. I started with nothing and have built a very nice business through hard work, from scratch.

What are the ways that entrepreneurial energy manifests in the client relationship? 

They tend to be appreciative of what we do for them. They tend to listen very well to recommendations. And they tend to be quick decision-makers. They know what it takes to reach a level of success because they’ve done it themselves. They know it requires hard work, being studious, being up more hours of the night. I’m still wound that way. I’m like my top client. In theory, I don’t have to work anymore, but I love what I do so much.

When you moved from more typical wealth management to the family-office space, how did things change for you? 

I was amazed. I was shocked to see what is available and how an investment banking company might treat me as the CEO of a family office versus the CEO of a wealth management firm. That was by far the biggest “aha.” We got into a lot more PE-type offerings, and that has actually progressed to doing direct investments. I’ve been shocked at how strong and consistent the performance is with some of these companies. The landscape changes when the firms looking for your business are aware that you have UHNW clients. It’s a different conversation, and you get hooked up pretty quickly with the upper end of the investment stratosphere.

I cringe when I say this, but something I kept saying to myself when I saw all this was “I understand why the rich get richer.” Because they get offered opportunities that are just not available to somebody that’s not rich. As someone who grew up lower-middle class, it goes against my grain. But at the same time, if the opportunity is there, you should take advantage of that sort of thing.

What’s a direct or co-investment you’ve been able to make that you’re excited about? 

Within our co-investment portfolio, the first company was Hipgnosis, which was brought to us by Blackstone. It’s a neat concept, a company based in the U.K. that holds rights to various music. They just purchased Justin Timberlake’s book of music rights. If Blackstone is becoming majority owners, history says they have a pretty good reason. Everybody makes mistakes, but Blackstone doesn’t make too many of them.

What’s something you know now that you wish you’d known 10 or 15 years ago? 

The Great Recession was a great learning stage for me. I had sleepless nights in 2008, worrying whether I was doing the best thing for my clients. Fast-forward to now, and I just have a sense of confidence that regardless of what’s going on out there, we are doing what’s best for our clients’ long-term interests. I don’t have those sleepless nights anymore. That attitude also conveys to the client. Clients know if you’re scared.

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Tom Ruggie, ChFC®, CFP® was recently the closing keynote interview at the 2023 Jolt! Conference, sponsored by the nation’s leading martech innovator Snappy Kraken. CEO Robert Sofia and Tom shared an inspiring conversation focused on how Tom’s passion for collectibles and his expertise in alternative investments have helped create a unique niche for Destiny Family Office, and are part of an overall commitment to excellence fueling the growth of Destiny Wealth Partners to a firm with nearly $1B in assets under management. Jolt! Has been named one of the top financial conferences in the country by Kitces.com.

Ruggie Wealth Management announced that Founder and CEO Thomas H. Ruggie, ChFC^®, CFP^®, has been named to this year’s Forbes Best-In-State Wealth Advisors’ list for the 5th time, (which reflects inclusion every year since the inception of the rankings). This year, he was ranked #5 in North Florida.

Forbes includes advisors from national wirehouses as well as independent RIAs in its rankings which spotlights the top-performing advisors across the country.  Determined by SHOOK Research, the list is based on an algorithm of qualitative and quantitative criteria, including in-person interviews, industry experience, assets under management, compliance records, and those who embrace best practices in their practices and approach to working with clients, and community involvement.

“Competition is steep to be selected for this list, and those who make the cut represent a very high level of achievement in serving their clients’ wealth management needs,” said Ruggie. “I believe our clients turn to us because of our dedication to placing their interests above ours, and for the strength of our processes and collective wisdom of our team. To be named to this list is an honor that reinforces we are doing what we set out to do on our clients’ behalf.”

According to SHOOK, “we scour the financial services industry—banks, brokerages, custodians, insurance companies, clearing houses and others for nominations.  Only about 2000 Advisors make the final listing.”

Unlike other advisor rankings, SHOOK Research creates rankings of role models—advisors who are leading the way in offering best practices and providing a high-quality experience for clients.

Neither Forbes nor SHOOK receive a fee in exchange for rankings.

Ruggie has received other national recognitions including being named to the Barron’s Top 1200 Advisors 11 times.

Ruggie Wealth Management provides services to individual and corporate clients, as well as to a select group of endowments and foundations. As the flagship company of Destiny Wealth Partners, Ruggie Wealth offers a broad range of services and products to help clients achieve their financial goals.

The firm has offices in Tavares, Winter Park and The Villages®, FL, partnering firms KCG Investment Advisory Services in Savannah, GA, and Nichols Wealth Partners in Boca Raton, FL, and is affiliated with Destiny Family Office, which is also a Destiny Wealth Partners’ firm.

About Tom Ruggie
Tom is a Chartered Financial Consultant (ChFC^®), a CERTIFIED FINANCIAL PLANNER™ (CFP^®) and a veteran of the investment and financial planning industries who began his career in 1991 and subsequently founded Ruggie Wealth Management to serve individuals, small businesses and non-profit organizations. In 2016, he founded Destiny Family Office, to simplify complexity for client families on a financial, business and personal level. Tom’s entrepreneurial spirit, investment strategy and steadfast dedication to client service have allowed him to grow Ruggie Wealth Management and related-companies into a continuum of financial services. Tom is also a philanthropist who founded The Tom and Kim Ruggie Family Foundation, and the author of three books available on Amazon: Ruggie Rules, Financial Wellness: How to Improve the Retirement Outcomes of Your Employees, and Ruggie WealthCare Retirement Scorecard. Visit Ruggie Wealth Management online at ruggiewealth.com and become a follower on Twitter and a fan on Facebook.

The Forbes ranking of Best-In-State Wealth Advisors, developed by SHOOK Research, is based on an algorithm of qualitative criteria, mostly gained through telephone and in-person due diligence interviews, and quantitative data. Those advisors that are considered have a minimum of seven years’ experience, and the algorithm weights factors like revenue trends, assets under management, compliance records, industry experience and those that encompass best practices in their practices and approach to working with clients. Portfolio performance is not a criterion due to varying client objectives and lack of audited data. Neither Forbes or SHOOK receive a fee in exchange for rankings.

Second Year in a Row for Prestigious Annual Award that Recognizes Innovation and Other Attributes

Destiny Family Office, a Destiny Wealth Partners firm, has been named a finalist in the prestigious 10^th Annual Family Wealth Report Awards in the Multi-Family Office category (up to and including $2.5 Billion in Assets Under Management/Assets Under Advisement).

According to Stephen Harris, ClearView Financial Media’s CEO, and publisher of Family Wealth Report, “The Annual Family Wealth Report Awards recognize the most innovative and exceptional firms, teams and individuals serving the family office, family wealth and trusted advisor communities in North America.”

“We founded our firm with a mission and purpose forged by what we saw as an unanswered need in the marketplace: families seeking advocacy, compelling wealth and investment management capabilities, and execution—without compromise,” said Tom Ruggie, ChFC®, CFP®, Founder and CEO of Destiny Family Office.

“While we serve many families, we operate as though we are the team serving a single family. We seek to get to know them intimately, coming to appreciate both their articulated and unarticulated needs, their challenges and aspirations. Only then can we truly deliver an exceptional experience uniquely tailored to them—a hallmark of our firm.

“From the perspective of our clients, it’s more than how we manage their financial needs and implement strategies; it’s how we stand beside them along their journey, helping them to better navigate the great complexity that encompasses their business, financial and personal worlds.”

The awards are judged by an expert panel of more than 40 judges, and finalists are selected on entrants’ submissions and their response to questions across a range of qualitative and quantitative criteria and performance metrics. The judging process is rigorous and independent.

“The firms and individuals in the 10th Family Wealth Report program are worthy competitors and the ones who have reached the Finalist stage are truly outstanding,” said Harris.

Winners will be announced May 4, 2023, at the Family Wealth Report Gala at the Mandarin Oriental in New York City.

About Destiny Family Office  

Destiny Family Office is a Multi-Family Office founded in 2016 by CEO Thomas Ruggie, a Chartered Financial Consultant (ChFC®), CERTIFIED FINANCIAL PLANNER™ (CFP®) and a 30-year veteran of the investment and financial planning industries. It was created to simplify complexity for its high-net-worth and ultra-high-net-worth client families and to empower them to focus on what is most important, so they may live their best lives and have the greatest impact on the world around them. Tom Ruggie began his career in 1991 and subsequently founded Ruggie Wealth Management, also a Destiny Wealth Partners Firm, which has nearly $1B in Assets Under Management. He has been ranked among Barron’s Top 1200 Advisors ten times, as a Forbes Best-in-State Advisor since its inception (and was 4th in N Florida in 2022), and has been a Forbes Finance Council member since 2016.

About Family Wealth Report 

Family Wealth Report provides unique and essential business intelligence on the world of North American family wealth—straight to subscribers’ inboxes every day along with an archive of almost 200,000 relevant articles. It is part of the global WealthBriefing Network. Family Wealth Report is published by ClearView Financial Media with more than 20 years of experience providing information to the international financial services sector.

Investment advisory services offered through Destiny Wealth Partners, LLC, an SEC Registered Investment Advisor. Destiny Wealth Partners also conducts business under the name Destiny Family Office and Ruggie Wealth Management. Rankings and/or recognition by unaffiliated rating services and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Destiny Family Office is engaged, or continues to be engaged, to provide investment advisory services, nor should it be construed as a current or past endorsement of Destiny Family Office by any of its clients. Rankings published by magazines, and others, may base their selections on information prepared and/or submitted by the recognized adviser. Barron’s rankings are based on factors including assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work.

We’re excited to announce the addition of Nichols Wealth Partners, a Boca Raton-based RIA led by Managing Partner and Senior Wealth Advisor Chris Nichols, to our Destiny Wealth Partners Family. Destiny Wealth Partners also does business under as Ruggie Wealth Management, Destiny Family Office, and KCG Investment Advisory Services, in Savannah, GA.

All four firms bring well-respected brands to the partnership and Nichols Wealth Partners will continue to operate as an independent firm. Chris will remain in charge of his business decisions and operations while adding resources, people, infrastructure, and technology to help the firm in its next phase of growth.

“Destiny Wealth Partners is excited to add such a high-caliber, well-respected team to our growing family,” said Tom Ruggie, ChFC®, CFP®, Founder and CEO of Destiny Wealth Partners. “Over the past two decades, Chris has earned a reputation as a caring, hardworking, passionate advisor who wants to see people win. Most of his clients are highly successful, and he works hard to help them preserve that success. He recognized the growth/balance/time constraint many advisors face as they build their businesses and found that joining Destiny Wealth Partners was a solution that allows him to do even more for his firm, his clients, and others.”

“After going through our planning process and mapping out our long-term growth, we knew we wanted to align with a like-minded group of leading innovators who shared a deep industry knowledge, vast network of specialized services, demonstrated investment strategies and abiding passion for serving clients,” said Chris. Greater efficiency will give me and my team more quality time to be present with our clients and to continue to build a sustainable, multi-generational firm with even greater access to investment options, improved high net-worth planning and succession strategies. That will be a positive for us and will translate to an even better experience for the clients we serve.”

“The marketplace is clamoring for high value, no matter the industry or profession,” said Chris. “Investors are demanding more and more from advisors. The Destiny Wealth Partners team recognized this shift taking place and has made some extraordinary leaps to prepare for the future growth of their firm. I know my clients will see the immediate effects of our partnership by having increased access to a broad sphere of investments including alternative investments for accredited investors and direct investments and co-investments for our qualified purchasers.”

“Tom has earned national recognition as an innovative and forward-looking advisor from some of the most respected names in the industry,” said Chris. “We are extremely excited for what our partnership together will bring to the table, both for our firm and our clients.” To schedule an appointment or second opinion with Nichols Wealth Partners, visit nicholswealth.com or call 561.939.8323. To reach Destiny Wealth Partners, visit RuggieWealth.com or call 352.343.2700.

Investment Advisory services offered through Destiny Wealth Partners, LLC an SEC Registered Investment Advisor. Recognitions are specific to Tom Ruggie, ChFC®, CFP®. Listing in any publication is not a guarantee of future investment success. These recognitions should not be construed as an endorsement of the advisor by any client. Barron’s rankings are based on factors including assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work. Forbes rankings are based on quality of practice, telephone and in-person interviews, client retention, industry experience, review of compliance records, firm nominations and quantitative criteria. *Additional disclosures and important information at ruggiewealth.com/disclosures.