Client Facts
- Married ages 60 & 55
- $1.2M IRA
- $200k Brokerage
- $100k Roth
- Retired and working until 60
- Social Security: $3,200 & $2,200 at 67
- $40,000/year pension
- $8,000 monthly retirement spending
Retirement Goals & Concerns:
- Leave any surviving spouse with largest Social and Security possible
- Reduce future RMDs
- Long-term care needs
What we did…
Cash-flow & Distribution Planning
- Delayed the larger Social Security check while taking the lower one early because of age difference.
- Use a combination of brokerage and IRA money early in retirement to keep taxes low.
- Using brokerage money to fund Roth IRAs for each while one spouse still has earned income.
Investment Planning
- Switching from traditional to Roth 401k contributions.
- Calculated their 5 income insulation need to protect against sequence of returns.
- Strategically moved income based investments from brokerage accounts to IRA accounts to reduce their tax drag.
Tax Planning
- Designed multi-year Roth conversion plan that starts at retirement.
- Starting at $30,000 per year and increasing to $80,000/year closer to age 75.
- Recommended the switch to Roth 401k contributions instead of traditional contributions.
Estate Planning
- Had a revocable living trust drafted and funded for ease of estate administration.
- Recommended they update their power of attorney documents because they were more than 10 years old.
- Created and had them fill out an “In case I’m not here” document for the surviving spouse and children.
Insurance & Risk Management
- Long-term care planning - Looking at 2 options:
- Earmarking the equity in their home for potential LTC needs if they arise.
- Purchasing a standalone hybrid policy that provides a portion of unused benefits back in the form of a death benefit.