Paul & Linda

 Ages 62 & 60

2 - 5 Years from Retirement

Primary Goals: Determining if they are on track to retire and what they need to do to prepare.

The Situation

Paul and Linda are unsure of the exact timing of their retirement, but they know it will be within the next few years.

Paul is a senior manager with a national homebuilder and Linda is a professor. Both enjoy their work, but the prospect of more time for travel and spending with family and friends excites them.

Paul wants to retire completely, while Linda, who enjoys her work, is considering part-time or consulting opportunities. Both want to stay active, both physically and mentally, and are open to volunteering.

They feel confident in their financial decisions and where they are today:

●  Earning good salaries
●  Maximizing contributions to their retirement plans
●  Accelerating the payoff of their home
●  Investing a small inheritance from Linda’s mother

Despite their confidence, Paul and Linda wonder if they are missing something. Are they making the right decisions and taking the right steps?

With so much conflicting information, they admit they don’t know what they don’t know.

As they approach retirement, they are looking for a specialist to help them make strategic financial decisions and prepare for the future. While not in a rush to retire, they want the assurance that they can when the time comes.

The Process

Paul and Linda found themselves overwhelmed by the abundance of information and choices. 

Busy with their careers, they lacked the time to sort everything out, prompting them to seek professional help and hire a financial planner.

The Outcome

With their financial planner's help, Paul and Linda developed a comprehensive strategy. This plan confirmed that they were on track and optimized their investments to balance risk and return as they approached retirement.

Their financial plan helped them improve their investments by recommending an improved asset allocation plan to provide better diversification. It also offered guidance on how to deploy the excess income they were bringing in. 

Taxes were a concern, so they implemented a long-term plan to reduce their tax liability, including strategies such:

● Roth conversions
● Smart charitable giving
● Tax loss harvesting

Uncertain about when to begin taking Social Security, their financial planner helped them choose the optimal age for each to start drawing benefits. They knew they would be transitioning off their employer’s health insurance, so their planner reviewed healthcare options and helped them settle on a cost effective plan. 

They also appreciated how the new financial software allowed them to see their entire financial life in one place, helping them understand the big picture.

This organization and clarity gave Paul and Linda comfort that they were on the right track. Their retirement roadmap freed up their time, allowing them to enjoy their final working years and retire when the time is right.

Note: The language and scenarios depicted in this case study are illustrative and do not reflect actual clients or real-life situations. Any resemblance to real persons or events is purely coincidental. The purpose of this study is to demonstrate theoretical concepts and strategies in a hypothetical context.

Sarah

Age 66

Retiring this year

Primary Goals: Create a tax-efficient income stream to replace her salary, transition to Medicare, and improve her investments.

The Situation

Sarah plans to retire this year and she is looking forward to doing all the things she’s been too busy to do while working.

She has two adult children and three grandchildren, though they don’t live nearby. She hopes to travel in retirement and spend more time with her family. 

After working for years as a senior manager at a large technology firm, Sarah is ready to slow down and focus on things other than work. She has been maxing her work retirement plan and has stock options, an IRA, and personal investments as well. 

She’s pretty sure she has enough to retire but she also may need to help her elderly mother financially, and she wants to leave something behind for her children. 

The Process

Sarah wants a retirement plan that considers all aspects of her financial life to ensure she doesn’t have any blind spots and reassurance that her savings and income can support her desired lifestyle.

She also has questions she doesn’t know how to answer:

  ● How can I consolidate my investment accounts?
  ● When should I start taking Social Security benefits?
  ● What tax strategies would reduce my taxes in retirement?
  ● Do I have sufficient funds to cover healthcare expenses for myself or my mother if either of us develop a chronic illness?
  ● How do I turn my investments into income to pay my expenses?
  ● Where will I age in my later years, and who will care for me?

Sarah knew that she needed professional financial advice to give her the answers and clarity she sought. 

The Outcome

With the help of her retirement advisor, Sarah was able to:

  ● Consolidate her assets and design an investment portfolio suitable for her age and goals. 
  ● Incorporate tax strategies to reduce her taxable income.
  ● Develop a tax-efficient income plan to pay her bills.
  ● Finalize her plans to transition to Medicare and determine the right age to claim her Social Security benefits.
  ● Create a longevity plan to address the possibility of a chronic illness for her or her mother.

With a comprehensive plan in place, Sarah feels confident in her ability to retire and meet her goals. She looks forward to having more free time to spend with her children, grandchildren, and mother.

Note: The language and scenarios depicted in this case study are illustrative and do not reflect actual clients or real-life situations. Any resemblance to real persons or events is purely coincidental. The purpose of this study is to demonstrate theoretical concepts and strategies in a hypothetical context

John & Stephanie

Ages 73 and 71

Already Enjoying Retirement

Primary Goals: Minimize stock market volatility, reduce taxes, increase charitable giving and prepare for future healthcare expenses.

The Situation

John and Stephanie retired a few years ago after fulfilling careers and are excited about their future.

They want to ensure their retirement plan will continue to support their current lifestyle while remaining flexible enough to adapt to changes in their lives or the broader economy.

Their priorities include minimizing taxes, stress-testing their retirement plan against unforeseen circumstances, improving their investment portfolio, and developing a longevity plan to address potential future healthcare expenses.

Now that they’re retired, they want to start volunteering in their community and focus more on their health and hobbies. John is eager to spend more time on his woodworking, while Stephanie wants to do more gardening and is considering taking some college classes. They have experienced some economic turbulence since retiring, and want to make sure their plan is still viable. They are also considering a move to a retirement community. John's primary goal in contacting a financial planner was to get a second opinion on their plan and investments to ensure they continue to meet their needs.

The Process

After getting a good understanding of John and Stephanie’s goals and concerns, their retirement planner modeled how their financial plan might handle a major market correction or an unforeseen healthcare crisis, and made recommendations for improvement. 

The planning process involved input from their CPA and estate planning attorney. Working as a team, they were able to:

  ● Determine the feasibility of John & Stephanie moving to a retirement community
  ● Identify strategies to increase their charitable contributions and reduce their taxes
  ● Realign their investment portfolio and income plan with their current goals

Having a professional review their plan and provide feedback gave them the confidence to move forward with their plans.

The Outcome

The review and update of their financial plan resulted in several benefits for John and Stephanie:

  ● Significant reduction in their current and future tax liability
  ● A lower risk investment portfolio with income that they couldn’t outlive
  ● Understanding how much they can increase spending by moving to a retirement community without jeopardizing their financial future

John and Stephanie are now making plans to move to their new community. Their planner connected them with a senior moving company and an auction firm so they could downsize into their new home.

They are excited about the future and confident that their financial situation will allow them to increase their charitable giving and spending on hobbies.

John and Stephanie appreciate that their planner reviews their plan every year, considering changes in inflation, the tax code, their health, and the economy. The reassurance that they can adapt if unexpected changes occur has given them the confidence to relax and pursue their goals.

Note: The language and scenarios depicted in this case study are illustrative and do not reflect actual clients or real-life situations. Any resemblance to real persons or events is purely coincidental. The purpose of this study is to demonstrate theoretical concepts and strategies in a hypothetical context.