CASE STUDY 2

Meet Mark and Sandy

Both are age 66 and ready to retire; it’s time to make important decisions. Both have devoted 25+ years to current employer and ready to move on to the next phase of life. The kids are through college, debts are paid off, and are soon be be grandparents. They both have been diligent savers and consistently saved 15% of their income. They have a current advisor, but now looking for more than just a money manager. They have no real retirement plan and seek a tax-focused approach to their retirement.

Withdrawal Plan

Mark and Sandy both decide it is in their best interest to delay and claim at age 70, even though both retired before 67. After comparing multiple withdrawal scenarios, they decide to spend down tax-deferred accounts upon retirement until age 70. Mark and Sandy will eventually have a combination of Social Security + IRA Income + ROTH IRA Income.

Tax Plan

Mark and Sandy agreed they wanted more than a stack of statements and a diversified pie chart. After looking at multiple tax bracket strategies, they decided that moving money from each of their tax-deferred accounts to Roth IRA “ROTH Conversions” would best address the tax issue and increase longevity of savings. An annual discussion would be determined to fill up the 22% bracket or 24%. They would like to get as much moved over as possible prior to claiming Social Security, but confirm this was still lowering their long term tax liability.

Investment Management

They utilized a bucket strategy to invest retirement accounts with a purpose and time horizon. Income needed sooner from the accounts was invested in dividend paying vehicles and more conservative portfolios. The portion of their savings, according to the withdrawal plan, that was not needed for income in 10 + years was invested for growth.

FINANCIAL FACTS

  • Total Assets: $1,700,000
  • All savings are in 401(k)s through their employers
  • $80,000 in checking and savings
  • No current $ in ROTH or TAX-Free

FINANCIAL FACTS

  • RETIRE WITHIN THE NEXT 12 MONTHS
  • MAINTAIN CURRENT NET MONTHLY INCOME
  • BETTER UNDERTAND HOW TO REDUCE TAXES, CREATE RELIABLE
  • INCOME FROM THEIR HARD-EARNED RETIREMENT ACCOUNTS, AND BE ABLE TO SLEEP AT NIGHT WITH THEIR INVESTMENT PLAN
  • ENSURE RETIREMENT PLAN IS LOOKED AT FROM ALL SIDES AND MAKE SURE THEY DO NOT RUN OUT OF MONEY
    ONLY PAY THEIR FAIR SHARE OF TAXES

ANTICIPATED SPENDING IN RETIREMENT

$108,000 annually after taxes, with 20% less after one of them passes away.

WEALTH MANAGEMENT BLUEPRINT RESULTS

√   TAX PLANNING
√   INVESTMENT MANAGEMENT
√   INCOME PLANNING

This information is provided for general informational purposes. The securities and strategies referred to in the information may not be suitable for you; therefore, it is important that you consider the information in the context of your own investment needs and objectives, including risk tolerance, investment goals and time horizon. This information is not intended to be a substitute for specific individualized investment planning advice.