Client Facts
- Married - still working
- Retiring in 2 years
- Ages 58/56
- Total Brokerage: $250,000
- Total Tax-Deferred: $1,100,000
- Total Roth: $100,000
- Cash: $80,000
- Social Security: $3,200 & $2,800 at 67
- Monthly spending: $7,500
- Annual Travel Budget: $15,000
Retirement Goals & Concerns:
- Maintain lifestyle while not running out of money
- Maximize tax-efficiency
- Help grandchildren with college expenses
- Protect against long-term care costs
- Charitable Giving of $5,000/year in retirement
- Leave a legacy to children and grandchildren
What we did…
Cash-flow & Distribution Planning
- Built a retirement budget based on their actual lifestyle and travel goals.
- Modeled different scenarios (earlier retirement, healthcare costs, market downturns).
- Created a tax-efficient withdrawal plan:
- Draw first from taxable accounts.
- Then pull from IRA accounts (after strategic Roth conversions).
- Roth IRAs preserved for later years or legacy.
- Planned Social Security timing: Delay until 70 to maximize benefits.
Investment Planning
- Shifted investment strategy to a diversified 70/30 portfolio focused on income and stability.
- Added more asset classes to increase their risk/reward ratio.
- Added an income reserve of 5 years' worth of expenses to buffer against market declines.
Tax Planning
- Implemented annual Roth conversions between ages 60-72 to fill lower tax brackets.
- Opened a Donor-Advised Fund (DAF) to pre-fund charitable giving and capture deductions during higher-income years.
- Capitalized on tax-loss harvesting in taxable accounts.
Insurance & Risk Management
- Reviewed 3 different long-term care risk solutions:
- They chose a hybrid LTC insurance policy with death benefit.
- Reviewed current life insurance:
- Reduced unnecessary coverage post-retirement.
Estate Planning
- Recommended they update wills, healthcare proxies, and durable powers of attorney.
- Established a revocable living trust to simplify asset transfer and avoid probate.
- Reviewed and updated beneficiaries on all accounts.