Client Facts
- Married - ages 53/53
- He plans to work until 60, she is self-employed.
- Income: $450,000
- Cash: $50,000
- Brokerage: $15,000
- IRA: $450,000
- Roth: $180,000
- Social Security:
- Him: $3,000/mo at 67
- Her: $1,800/mo at 67
- Spending Goal: $144,000/year
Retirement Goals & Concerns
- They wanted to be sure they were saving enough to continue their current lifestyle through retirement.
- They had excess cash flows and wanted to know the best way to save their money.
- They wanted to ensure when they get to retirement, they had plenty of options to spend money.
- They wanted to be sure their planning accounted for healthcare costs prior to Medicare.
- They wanted to be sure what they were investing in was best for them.
- They were considering purchasing a long-term care policy and wanted to know the pros/cons.
- They both owned term life insurance policies and wanted to know if they were worth keeping.
- They wanted a clear outline for their estate plan.
What we did...
Cash-flow Planning
- We calculated exactly how much money they would need to save each month to spend $144,000/year starting at age 60.
- We determined what savings vehicles they had available to them.
- 401k, Roth 401k, IRA, Roth IRA, Solo 401k, Brokerage.
- We outlined how much excess cash flow they have after spending that could be used towards saving for retirement.
- We had them fully fund a traditional 401k, open a solo 401k for more tax-deferred savings, fund a backdoor Roth IRA and execute a Mega backdoor Roth.
- They will start funding a brokerage account as well.
Investment Planning
- We increased the growth side of their portfolio.
- They had a 70/30 allocation which isn't needed when retirement is 7+ years away.
- We reviewed their current 401k options and gave them our recommended allocation.
- We reviewed their current Roth IRA investments and recommended a simplified ETF portfolio consisting of 12 ETFs.
- Around 5 years from retirement, we will start increasing the income side of the portfolio.
Tax Planning
- We reviewed their most recent tax return and ran a full analysis to determine what planning opportunities were available.
- We ran a detailed income/tax projection for this year along with all future years.
- This helped us determine the best way save money.
- Because of their high income this year, up until retirement, we recommended they fund traditional accounts to delay paying the taxes.
- We reviewed what investments they had in their accounts and switched some to make their accounts more tax efficient.
Estate Planning
- They own property in 2 states so we recommended they have a trust drafted and funded.
- We discussed what they would want to happen with their money after they pass.
- We used this information to detail an efficient estate plan.
- We reviewed every account's beneficiary and confirmed the correct person(s) was listed.
- We recommended they update their Will and Power of Attorney since they were over 10 years old.
Insurance & Risk Management
- We reviewed their current life insurance policies and recommended they keep them.
- This was based on the current premium, term left and insurable need/want.
- We outlined the pros/cons of purchasing a long-term policy considering their family health history and assets available.
- We reviewed their current home/auto policies and had them increase their liability amounts.
- We will also need to inform their insurance carriers the homes are owned by the trust once that's complete.
- We had them purchase a $1M umbrella policy.