Financial Planning… | New Horizons Boutique Financial Services

Overview

What Financial Planning in Minnesota Means

Financial planning in Minnesota is the process of building a comprehensive strategy for your investments, taxes, retirement income, estate, and insurance that accounts for Minnesota-specific tax rules, public pension provisions, and estate tax thresholds. Unlike a generic national approach, Minnesota financial planning requires understanding how the state taxes Social Security benefits for higher earners, how public pension subtractions work for PERA and TRA members, and how the state estate tax applies at a threshold well below the federal exemption.

For executives, business owners, and professionals approaching retirement, these state-level distinctions can materially affect after-tax income, retirement timing, and what passes to the next generation. A comprehensive plan coordinates all of these factors rather than treating them in isolation. Explore our detailed retirement planning in Minnesota guide or our analysis of Minnesota state taxes on retirement income.

Minnesota is one of a minority of states that taxes Social Security benefits, though partial subtractions are available for qualifying retirees below certain income thresholds. The state also imposes an estate tax with a $3 million per-person exemption, significantly lower than the federal estate tax exemption. Public pension rules, including the Rule of 90, affect retirement timing for many state employees, teachers, and public-sector workers. These factors make professional financial planning in Minnesota distinctly different from planning in states with no income tax or no estate tax.

Why Minnesota Is Different

1
Minnesota taxes Social Security benefits for higher-earning retirees, though partial subtractions are available below income thresholds of $110,780 (MFJ) and $86,410 (single), as of 2026
2
The state estate tax exemption is $3 million per person, far below the federal exemption, creating planning considerations for Minnesota families with moderate to significant assets
3
Public pension rules, including the Rule of 90, affect retirement timing for PERA, TRA, and MSRS members
4
No broad retirement income exclusion exists, making proactive tax planning essential for retirees drawing from 401(k), IRA, and pension sources
5
A 2025 Minnesota law (SF 952) gradually increases the allowable Social Security subtraction by 10 percentage points annually through 2034, which may affect multi-year planning strategies

Key Numbers

Minnesota-Specific Planning Factors

Several Minnesota tax provisions affect how professionals should structure their retirement income, manage tax exposure, and plan for wealth transfer. Understanding these factors is essential for building a plan that fits the state's financial landscape. The figures below reflect tax year 2026.

5.35%

to 9.85% MN income tax rates (2026)

$3M

MN estate tax exemption per person

$110,780

Social Security subtraction phase-out (MFJ)

13%

to 16% MN estate tax rates

Income Tax Brackets

Minnesota uses four progressive brackets. For single filers in 2026: 5.35% up to $33,310, 6.80% on income $33,311 to $109,430, 7.85% on income $109,431 to $203,150, and 9.85% above $203,150. Married filing jointly brackets start at 5.35% up to $48,700, rising to 9.85% above $337,930. These rates apply to most retirement income, including traditional 401(k) and IRA withdrawals, with no broad exclusion.

Social Security Taxation

Minnesota allows a subtraction of taxable Social Security benefits, but it phases out based on adjusted gross income. Full subtraction is available for MFJ filers with AGI at or below $110,780 and single filers at or below $86,410. Above those thresholds, the subtraction is reduced by 10% of taxable benefits for each $4,000 of additional AGI. A 2025 law (SF 952) gradually expands a secondary subtraction through 2034.

Estate Tax

Minnesota imposes an estate tax on estates exceeding $3 million per person, with graduated rates from 13% to 16%. A qualified small business or farm deduction may add up to $2 million in additional exclusion. Unlike the federal estate tax exemption, Minnesota's threshold is not portable between spouses, making coordinated estate planning especially important for married couples.

Sources: Minnesota Department of Revenue, Tax Year 2026 inflation-adjusted amounts (updated August 2026); Minnesota House Research, Social Security taxation publications; Minnesota DOR Estate Tax pages. See revenue.state.mn.us and house.mn.gov for official publications. Tax rules may change; consult a tax professional for your situation.

Our Services

What Comprehensive Financial Planning Includes

Comprehensive financial planning coordinates every aspect of your financial life into a single, cohesive strategy. Each area below is addressed not in isolation but as part of an integrated plan designed to align with your goals and Minnesota's tax environment. For executives and business owners, this coordination is especially important because decisions in one area, such as when to exercise stock options, can ripple through tax brackets, retirement income, and estate exposure simultaneously.

01

Retirement Strategy Development

Build retirement income strategies accounting for Minnesota's tax treatment of Social Security, pensions, and account withdrawals. Includes RMD planning, Roth conversion timing, and Social Security claiming decisions. For executives with deferred compensation, the sequencing of income sources can significantly affect after-tax outcomes. Results vary by individual circumstances.

02

Tax Optimization Planning

Coordinate tax planning strategies with investment and retirement decisions to help reduce unnecessary tax exposure. Minnesota's progressive rates and limited retirement income exclusions make this especially relevant for high-earning professionals. Trade-offs may apply, and strategies should be evaluated against your full financial picture.

03

Estate Planning Coordination

Align beneficiary designations, ownership structures, and gifting strategies with Minnesota's estate tax rules. The $3 million state exemption may create exposure even when no federal estate tax applies. See our estate planning coordination guide for strategies addressing the gap between state and federal thresholds.

04

Financial Independence Planning

Analyze assets, income streams, and expenses to determine whether you are ready to stop working. Our financial independence planning process provides structure and clarity for this critical decision, addressing the question that many professionals hesitate to ask: am I truly ready?

05

Executive Financial Planning

Address equity compensation, deferred compensation, and concentrated stock positions for corporate executives. Explore our concentrated stock strategies, stock options guidance, and executive financial planning services.

06

Business Owner Exit Planning

Plan for liquidity events and life after business ownership. Our business owner exit planning addresses valuation, tax exposure, and post-transition income strategy. For Minnesota business owners, the state estate tax threshold adds another layer of coordination between business succession and personal estate planning.

Who We Serve

Built for Minnesota Professionals Approaching What Comes Next

Financial planning is most valuable when your situation involves complexity. If you are an executive with equity compensation navigating a retirement transition, a business owner preparing for a liquidity event, or a professional asking whether you are truly ready to stop working, fragmented decisions across investments, taxes, and retirement can create inefficiencies and missed opportunities.

Our team builds a comprehensive strategy first, covering investments, taxes, income, cash flow, debt, insurance, and estate planning, before any products are recommended. This strategy-first approach is designed to provide the structure, clarity, and confidence that professionals need when the stakes are highest. Results vary by individual circumstances, and trade-offs may apply.

If you are unsure whether you are ready for financial planning, a no-cost first conversation can help you understand where you stand and what comes next. Learn more about working with a financial advisor in Minnesota or explore wealth management services statewide. We also serve physicians through our financial advisor for doctors practice.

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Executives Nearing Retirement

Professionals planning a transition from career to financial independence, often with equity compensation and deferred compensation to coordinate. We provide structure and clarity through a comprehensive, strategy-first plan tailored to your goals.

Business Owners Exiting

Owners undergoing strategic planning for liquidity events and life after business ownership. We build a full financial strategy addressing valuation, tax exposure, and post-transition income before any recommendations are made.

Professionals Seeking Clarity

Individuals wanting to understand where they stand today financially and what comes next. Our Financial Independence Planning analyzes assets, income streams, and expenses to answer that question with clarity.

People Wanting Financial Freedom

Individuals developing a long-term strategy designed to create flexibility, security, and future opportunity. Tax Optimization Planning coordinated with investment and retirement strategy aims to help reduce unnecessary tax exposure.

Our Approach

The Boutique Difference: Strategy Before Products

New Horizons Boutique Financial Services operates as a fiduciary, meaning our team is legally obligated to act in your best interest. Every recommendation begins with a comprehensive strategy before any products are considered. We intentionally limit our client count so each relationship receives full time and attention.

Boutique by Design

We intentionally limit the number of clients we serve so every relationship receives the time, focus, and attention it deserves. This may mean longer wait times for new engagements, but it ensures that existing clients always have direct access to their advisor.

Strategy Before Products

Every recommendation begins with a clear strategy covering investments, taxes, income, cash flow, debt, insurance, and estate planning before any products are recommended. Products follow the strategy, never the other way around.

A More Personal Experience

Clients work directly with their advisor, building a relationship based on trust and accessibility. No call centers, no hand-offs to junior staff. You work with the same team over time.

Built for the Long Term

Ongoing partnership with quarterly reviews, adapting strategy as life and goals evolve. Planning is a continuous process, not a one-time deliverable. Our team includes Lars Engman, MBA and Alec Engman, B.S. Economics, University of Minnesota.

FINRA Series 7 FINRA Series 63 FINRA Series 65 FINRA Series 66 Life and Health Insurance Licensed MBA, Lars Engman B.S. Economics, U of M, Alec Engman

Learn more about what a fiduciary financial advisor is, the differences between a fiduciary advisor and a broker, or explore our fee-only financial advisor services.

Common Questions

Frequently Asked Questions About Financial Planning in Minnesota

How Much Does a Financial Advisor Cost in Minnesota?

Financial advisor fees in Minnesota typically follow one of three structures: fee-only (flat fee, hourly rate, or percentage of assets managed), fee-based (a combination of fees and commissions), or commission-based (payment from product sales). Fee-only advisors aim to reduce certain compensation-related conflicts by charging transparent fees rather than earning commissions. Actual costs vary based on the complexity of your situation and the services provided. Learn more in our guide to the average fee for a fiduciary financial advisor or explore fee-only advisors in Minnesota.

Fee Structure	How It Works	What to Consider
Fee-Only	Flat fee, hourly rate, or percentage of assets managed	Aims to reduce compensation-related conflicts; costs are transparent
Fee-Based	Combination of asset-based fees and product commissions	May involve compensation from multiple sources; ask for full disclosure
Commission-Based	Advisor earns commissions from product sales	Creates potential incentive to recommend specific products

Is It Worth Paying for Financial Planning?

The value of financial planning depends on your situation. If you have multiple income sources, equity compensation, a business transition, or questions about retirement readiness, professional planning may help you identify strategies and avoid costly mistakes. For those with straightforward finances, self-directed planning may be sufficient. A no-cost first conversation can help you determine whether professional planning fits your needs. See our detailed analysis: Is it worth paying a financial advisor?

What Is a Red Flag for a Financial Advisor?

Common red flags include pressure to purchase specific products before understanding your full financial picture, vague or undocumented fee structures, unwillingness to provide Form ADV, and lack of fiduciary commitment. An advisor who leads with products rather than strategy, or who cannot clearly explain how they are compensated, may not be acting in your best interest. Review our complete guide to red flags when choosing a financial advisor and learn how to find a good fiduciary financial advisor.

Does Minnesota Tax Social Security and Retirement Income?

Yes. Minnesota taxes most retirement income, including traditional 401(k) and IRA distributions, most pension income, and Social Security benefits for higher-earning retirees. The state offers a partial Social Security subtraction for qualifying taxpayers below certain income thresholds ($110,780 for married filing jointly and $86,410 for single filers, as of 2026), but this subtraction phases out as income rises. A 2025 Minnesota law (SF 952) gradually increases the allowable Social Security subtraction by 10 percentage points annually through 2034. Traditional retirement account withdrawals are fully taxable at Minnesota's ordinary income rates with no special exclusion. See our comprehensive Minnesota retirement income tax guide for details.

Is Minnesota a Good State for Retirees?

Minnesota offers both advantages and trade-offs for retirees. On the challenging side, the state taxes Social Security benefits for higher earners, taxes most retirement income at rates up to 9.85%, and imposes an estate tax at $3 million. On the positive side, Minnesota offers a senior property tax refund program for homeowners age 65 and older who meet income guidelines, provides partial subtractions for Social Security and public pension income below certain thresholds, and has a relatively low cost of living compared to coastal states. Whether Minnesota is a good fit depends on your individual tax situation, income sources, and priorities. See our guides on retirement planning in Minnesota and how much you need to retire in Minnesota.

At What Net Worth Should I Hire a Financial Advisor?

There is no single net worth threshold that determines when professional financial planning becomes appropriate. The decision depends more on the complexity of your situation than on a specific dollar amount. If you have equity compensation, multiple retirement accounts, a business sale on the horizon, or questions about whether you can afford to stop working, a financial advisor may provide value regardless of your net worth. Explore this question in detail: At what net worth should you hire a financial advisor?

Our Reach

Serving Minnesota Communities

New Horizons Boutique Financial Services is headquartered in Lake Elmo and serves professionals across the Twin Cities metro and greater Minnesota. Our team works with clients in person and remotely throughout the state. Whether you are in the east metro, the western suburbs, or greater Minnesota, our boutique approach brings the same level of attention and strategy-first planning to every relationship.

1

Lake Elmo

2

Minneapolis

3

St. Paul

4

Anoka County

5

Arden Hills

6

Afton

7

Bayport

8

Stillwater

9

Minneapolis Fiduciary

10

Minneapolis Fee-Only

11

Minneapolis Retirement

12

And greater Minnesota

Start With a Strategy, Not a Product

Whether you are approaching retirement, navigating a business transition, or simply seeking clarity about where you stand, a no-cost first conversation can help you understand your options. Every plan we build starts with a comprehensive strategy tailored to your goals and Minnesota's financial landscape.