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Monday - Friday 9 a.m. - 5 p.m.
Winter Park, Florida, 32789
Advanced wealth planning for executives of Siemens Energy--a global leader in energy technology.
Financial Harvest Wealth Advisors offers education and strategic wealth and retirement planning services that can help Siemens Energy and other highly compensated Siemens employees understand their savings and benefits options, positioning them to maximize opportunities to secure and accumulate wealth.
Many of the examples shown on this webpage represent strategies we’ve used to help clients with their Siemens and Siemens Energy employee benefits. However, the ideas presented are informative for anyone interested in learning more about how employers can partner with their employees, helping their valued team members achieve financial wellness.
Financial Harvest Wealth Advisors assists highly compensated employees (HCEs) of Siemens and Siemens Energy and other public and privately held companies, helping them maximize their retirement savings, tax strategies, and life and disability coverage.
Learn how your organization can enhance its employee benefits offerings by contacting Financial Harvest Wealth Advisors.
Financial Harvest Wealth Advisors assists executives of Siemens and other public and privately held companies, helping them maximize their retirement savings and life and disability coverage.
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How willing are you to scale back your current lifestyle when you reach retirement? How much are you willing to compromise having the freedom and flexibility to enjoy what matters most to you and your family?
These are tough but real questions employees and executives face. And the more your income increases, the harder these questions may be for you to answer without objective, third-party insights and guidance.
We invite you to explore the topics below and then talk with David Witter for 30 minutes. One no-obligation phone call could lead to a significantly more secure future for you and your family.
Email david@financialharvest.com
Or, schedule now:
30-minute video meeting
30-minute phone meeting
401(k) plans are qualified plans that employees can contribute to on a pre-tax, Roth, and after-tax basis. Contributions, including any investment earnings, remain untaxed until they are distributed.
Siemens Energy generously contributes up to 10% of an employee’s pensionable salary, significantly enhancing the employee’s retirement savings.
For an executive earning $200,000 per year, this company contribution could mean an additional $20,000 contributed to their retirement savings annually. Over a career lasting several decades, this employer contribution alone could potentially grow to over a million dollars, assuming average market return.
| Plan Participant/Employee Contributions | Pre-tax deferrals |
| Roth | |
| After-tax deferrals | |
| Combination of the above | |
| Plan Sponsor/Employer Contributions | Employer match is pre-tax, and allocated to the traditional 401(k) bucket |
Employees can choose to save (defer) a portion of their pay ranging from 2% to 50% through convenient payroll deductions. These contributions are made on a before-tax (tax-deferred) basis, leading to significant tax savings today while preparing for the future.
The DCP allows executives to defer a portion of their salary, bonuses, or other compensation. This deferred amount is not immediately taxed, providing a current-year tax benefit. The deferred compensation grows tax-deferred until it is distributed, typically during retirement or at a predetermined future date.
Participants in the DCP can usually choose from a menu of investment options similar to those found in a 401(k) plan. These are phantom investments and not set aside directly by the company. Participants can elect to receive their deferred compensation in a lump sum or installments over several years. This flexibility can be particularly useful for tax planning, allowing executives to spread their income and potentially stay in lower tax brackets during retirement if planned accordingly. However, if you are changing your distribution elections, there typically is a delayed start period that could be up to 5 years from retirement or separation of service.
| Advantages | Considerations |
|
|
| Advantages |
|
| Considerations |
|
| Approach | Result | Strategy |
| Tax-Loss Harvesting | Offset gains through tax liability | Sell securities at a loss to offset a capital gains tax liability and then immediately buy into a like-kind position |
| Timing of Asset Sales | Lower capital gains rates | Assets held for over a year are subject to long-term capital gains rates that are generally lower than short-term rates |
| Net Investment Income Tax (NIIT) | Lower capital gains rates | Planning around the NIIT threshold of $200k of modified adjusted gross income for individuals and $250k for married filing jointly can help minimize this additional tax burden |
| Charitable giving | Avoid all capital gains tax | By donating appreciated securities directly to a charity, executives can avoid paying capital gains tax on the appreciation while still receiving a tax deduction for the full market value of the securities |
| Approach |
| Tax-Loss Harvesting |
| Timing of Asset Sales |
| Net Investment Income Tax (NIIT) |
| Charitable giving |
| Result |
| Offset gains through tax liability |
| Lower capital gains rates |
| Lower capital gains rates |
| Avoid all capital gains tax |
| Strategy |
| Sell securities at a loss to offset a capital gains tax liability and then immediately buy into a like-kind position |
| Assets held for over a year are subject to long-term capital gains rates that are generally lower than short-term rates |
| Planning around the NIIT threshold of $200k of modified adjusted gross income for individuals and $250k for married filing jointly can help minimize this additional tax burden |
| By donating appreciated securities directly to a charity, executives can avoid paying capital gains tax on the appreciation while still receiving a tax deduction for the full market value of the securities |
| Risk Group | Strategy |
| Executives with a large portion of their wealth in Siemens or Siemens Energy stock, or any single company stock | Utilizing derivatives and other financial instruments as part of a comprehensive risk management strategy may provide a hedge against potential losses. Example: using options strategies, like covered calls or stop loss limit orders, to protect against downside risk while maintaining upside potential |
| Executives with a diversified portfolio but with heavy exposure to a single factor | True diversification involves spreading risk across uncorrelated or negatively correlated assets |
| Executives whose portfolio needs rebalancing | As different assets perform differently over time, the original asset allocation can drift; periodic rebalancing helps maintain the desired risk profile and can even boost returns |
| Risk Group |
| Executives with a large portion of their wealth in Siemens or Siemens Energy stock, or any single company stock |
| Executives with a diversified portfolio but with heavy exposure to a single factor |
| Executives whose portfolio needs rebalancing |
| Strategy |
| Utilizing derivatives and other financial instruments as part of a comprehensive risk management strategy may provide a hedge against potential losses. Example: using options strategies, like covered calls or stop loss limit orders, to protect against downside risk while maintaining upside potential |
| True diversification involves spreading risk across uncorrelated or negatively correlated assets |
| As different assets perform differently over time, the original asset allocation can drift; periodic rebalancing helps maintain the desired risk profile and can even boost returns |
After-tax contributions, also known as non-deductible contributions, are made with money that has already been taxed.
There is no upfront tax deduction.
But the growth, when utilized effectively, and eventual withdrawals from the account are tax-free.
For Siemens Energy executives, after-tax contributions can serve as a powerful tool to supplement their retirement savings strategy.
Importantly, the growth of these contributions is tax-deferred or tax-free if rolled into a Roth vehicle promptly, allowing the money to compound more quickly than it would in a taxable investment account. This can be particularly advantageous for Siemens executives, who may be looking to maximize their retirement savings beyond the limits of standard 401(k) contributions.
Unlike traditional pre-tax contributions, which are fully taxable upon withdrawal, after-tax contributions allow for tax-free withdrawals of the principal amount. This can provide valuable tax diversification in retirement, allowing retirees to manage their tax liability more effectively by drawing from a mix of taxable and non-taxable accounts.
One effective strategy for utilizing after-tax contributions is the Mega Backdoor Roth.
This strategy involves making after-tax contributions to a 401(k) plan and subsequently converting them to a Roth IRA. The funds grow tax-deferred until converted and can be withdrawn tax-free in retirement once moved into a Roth IRA, providing significant flexibility in tax planning.
For Siemens executives, these strategies can be particularly powerful. The mega backdoor Roth, if available through the company’s 401(k) Summary Plan Description (which Siemens Energy does permit), allows for substantial additional contributions beyond the standard limits. This can be an excellent way to build up a large pool of tax-free money for retirement.
Example: Let’s say a Siemens Energy Vice President contributes the 2025 IRS limits, and their deferral breakdown looks like this:
On the other hand, the Backdoor Roth strategy can be useful for executives who are above the income limits for direct Roth IRA contributions. By making non-deductible contributions to a traditional IRA and then immediately converting to a Roth IRA, high-income earners can effectively contribute to a Roth IRA regardless of income limits.
It’s important to note that these strategies can be complex and may have tax implications if not executed correctly. Therefore, working with a qualified financial advisor or tax professional is advisable to ensure proper implementation.
Leveraging professional financial advice is essential for executives in companies like Siemens, Siemens Energy, and Lockheed Martin, i.e., to navigate complex financial landscapes effectively. Financial advisors are critical in providing tailored advice based on an individual’s financial situation and goals. They offer services that include estate planning, tax strategies, and investment management, ensuring a holistic approach to wealth management.
A financial advisor specializing in helping Siemens executives can help make proactive, not reactive, informed decisions about their deferred compensation plans, stock options, and other complex benefits. They can also provide valuable insights on tax-efficient investment and withdrawal strategies and help executives balance their current lifestyle needs with long-term financial goals.
Email david@financialharvest.com
Or, schedule now:
30-minute video meeting
30-minute phone meeting
Whether we serve you face to face or via our digital platforms, we are committed to ensuring that you have the answers you need for sound and confident decision making to help you build and preserve wealth.
1091 W. Morse Blvd., Suite 200
Winter Park, Florida, 32789
All examples used in this document are hypothetical and are for illustrative purposes only.
This information is intended to be used for educational purposes only and does not constitute tax, legal, or investment advice.
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