Contributed by: Dale Shaw, CFP
For many high-net-worth families and successful business owners, the traditional rules of retirement may no longer apply. Portfolio models built exclusively on stocks, bonds, and annuities may still serve a purpose, but they are increasingly insufficient for those seeking more control, higher income potential, and better protection from volatility and taxes.
The investment landscape has evolved—and with it, so has the nature of retirement planning. One of the most significant developments in recent decades has been the rise of private market investing. Once the domain of institutions and ultra-wealthy families, access to private equity, private credit, real assets, and direct investment opportunities is now expanding. This shift presents both an opportunity and a responsibility: to understand how these investments can be integrated into a retirement strategy that is both resilient and rewarding.
Why Private Markets Matter Now
Public markets may more accessible, liquid, and transparent—but they are also more efficient, meaning that generating outsized returns often comes with outsized risk. Private markets, by contrast, offer potential advantages such as:
- Enhanced diversification
- Illiquidity premiums (returns that compensate for the longer investment horizon)
- Access to unique opportunities not available on public exchanges
- Tax efficiencies through structures like qualified opportunity zones or private placement life insurance
For individuals and families who meet at least the accredited investor threshold, these vehicles can offer a compelling complement to traditional asset classes. But the key is alignment: these investments must be selected and integrated based on the broader goals of the retirement plan—not just opportunistically added to a portfolio.
Reframing Retirement Objectives
Historically, retirement planning has focused on one central objective: to ensure that a client doesn’t outlive their assets. That goal remains, but the complexity has increased. Today’s retirees must plan for:
- Extended time horizons, often 25 to 35 years or more
- Income needs that rise with inflation but fluctuate in lifestyle
- Higher healthcare costs and long-term care planning
- Intergenerational wealth transfer with minimized tax drag
In this context, private market investments can serve a unique role—not as speculative vehicles, but as strategic tools for producing stable, tax-advantaged income and long-term appreciation. For example, private credit strategies may deliver consistent yields not easily found in traditional fixed income. Real estate funds, especially those structured with tax-deferral benefits, can generate predictable income with built-in inflation hedges.
But perhaps the greatest value of private markets in retirement planning is their ability to help clients match the character of their investments to the character of their retirement.
Integrating Private Markets: A Coordinated Approach
At Granite Harbor Advisors, we often work with families who have spent decades accumulating wealth through closely held businesses, executive compensation packages, or concentrated investment portfolios. These clients are not just seeking more investment options—they are seeking more intentional ones.
When integrating private market strategies into a retirement plan, several principles guide our process:
1. Cash Flow Alignment
We begin by mapping the anticipated retirement income needs—not just for year one, but across a 30-year spectrum. From there, we identify how private investments can create complementary income streams. For example, staggered commitments to private credit or income-producing real estate can offset drawdowns from public equity in down markets.
2. Tax Efficiency
Private markets offer unique opportunities for tax deferral or reduction, but only when portfolios are structured accordingly. We frequently coordinate with clients’ CPAs and estate attorneys to evaluate strategies such as:
- Opportunity zone funds
- 1031 exchanges
- Private placement life insurance (PPLI)
- Charitable trusts using private assets
These solutions can significantly improve net retirement income and after-tax legacy outcomes.
3. Liquidity Management
Private investments come with a trade-off: limited liquidity. That reality is not inherently negative; it simply requires thoughtful planning. When designing a portfolio to include a private allocation, we strive to ensure that a client’s retirement income needs are met through predictable, liquid assets while the allocation in private markets matures on its own timeline.
4. Due Diligence and Oversight
Access alone is not enough. Private investments require robust due diligence, ongoing monitoring, and performance tracking. Unlike public funds, these vehicles often lack daily pricing and standardized reporting. That’s why we dedicate resources to managing selection, transparency, and client education to help prevent private markets from becoming a source of confusion or unidentified risk.
Looking Ahead
Private markets are not a silver bullet. They are complex, opaque, and often require long holding periods and higher minimums. But when used thoughtfully—and within the context of a coordinated financial plan—they can offer an unmatched opportunity to shape retirement outcomes with more precision and confidence.
For families seeking more than just a traditional glide path into retirement, private investments offer something that’s often missing in standard planning conversations: choice.
- Choice in how income is generated.
- Choice in how taxes are managed.
- And choice in how wealth is ultimately used to reflect values, support heirs, and create impact.
At Granite Harbor Advisors, we believe that sophisticated solutions—delivered with clarity and care—are what our clients deserve. Retirement may mark the end of a career, but it’s also the beginning of a chapter where financial decisions must be more intentional than ever. In a private markets world, the opportunities may be greater—but so is the need for guidance.