BILL & SUSAN
CASE STUDY #2
55 & 57
Understand his options in moving forward to feel more secure about his future retirement income.
Bill has always been the breadwinner as Susan stayed home and took care of their three kids. With the youngest child now finishing up medical school, Bill wants to make sure he is focused on securing their retirement.
He knows that most of this retirement is locked into his employer in the form of a 401k, pension, ESOP, and a restricted stock plan, but he is also one of the higher paid employees and he knows the company could eliminate his position to cut costs.
Bill was told by some friends to plan around a 4% withdrawal rule, but he has no idea how to navigate around that with all the different types of accounts and tax rules.
The obstacle isn't overcoming a bad situation, but in fully understanding their current situation and having a future game plan on how to transition in the future when needed.
So what's the challenge?
Figuring out the best approach from a tax perspective in adding and withdrawing from investment accounts
Understanding what would happen in the event of a layoff
Diversifying away from having as many investments tied into the company
Having a game plan to continue medical coverage prior to age 65
Bill isn't boxed into a corner at this time, but he knows that things could change at any time and working on a plan now will give him more options in the future.
Bill knew he didn't know enough to feel confident in his future options. He talked with his accountant and the investment professional on the work 401k, but neither of them could help him. He decided to seek help from a financial planner that took his whole financial picture into consideration and understood how to best help him today.
In this situation he will need to have tax accountants and estate planning attorneys involved to best serve him. Because he already had a good accountant, he is happy to jointly collaborate on the plan.
When Bill first began thinking about this, he didn't know who to turn to. He had never worked with a financial advisor besides the woman who sold him a whole-life policy back in his 20's that he still regretted. He wanted someone that would help be the guide and explain his options and put his interests their own.
A game plan was put into place for Bill and Susan that offered the following:
A retirement plan that showed how much money they would need overall to fund their future goals.
A breakdown of all their investment accounts and explanation on how to best access them in a tax-efficient manner.
A tax-efficient investment strategy and review for retirement income planning with social security timing.
Estate planning strategies and I walk-through on account transition and protection.
A pension and stock option analysis covering how to maximize returns.