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Case Study - Pre-retirement

Pete and Jill are married and recently left their jobs to start their own marketing company in New York.  Their company quickly became successful and their annual income moved into the top tax bracket.  They also welcomed their first child to their family and planned on buying a home in the near future.

With their company and family obligations taking priority, they needed an experienced professional to create and manage the finer details of their financial plan and investments.  We had multiple discussions regarding their ideal life and designed a financial plan that would help them achieve their dreams.

As part of their plan, we:

  • Organized their financial picture into an easy-to-understand summary including providing access to their own personal financial planning portal.

  • Identified future cash flow needs and segmented their cash into two different buckets: 1: Short term/emergency funds and 2: Intermediate/longer term savings.   

  • Recommended shorter term cash was invested into a blend of tax-free municipal bond funds which offered significantly higher after-tax yields than their bank account.

  • Advised longer term cash to be invested into a combination of low volatility equity positions and tax deductible retirement plans.

  • Analyzed the benefits of taking a low-interest rate mortgage for a future home purchase in lieu of making a sizeable down payment.

  • Helped them reduce their taxable income by implementing and funding a solo 401k plan to allow for maximum defined contribution plan contributions of $57,000/yr. for both Pete and Jill.

  • Discussed the additional possibility of making additional, tax deductible retirement plan contributions into a “Cash Balance” Defined Benefit Plan.

  • Designed a tax-efficient, liquid, investment portfolio that aligned with the optimum amount of risk Pete and Jill wanted to take, while also utilizing ESG investments.

  • Introduced them to investment strategies that would provide market downside buffers while also providing enhanced equity upside.

  • Opened a 529 College Savings plan that allows for tax free wealth accumulation along with tax deductible state contributions.

  • Reviewed life insurance needs and recommended appropriate amount of term insurance

  • Properly titled all accounts including updating beneficiaries.  The benefits of a revocable trust were also discussed.

  • Provided a retirement plan illustration including various “what-if” scenarios based upon possible life and market events.

  • Provided a 2 page summary of specific recommended action items.

  • Lowered their advisory fees from what they were paying with their wirehouse advisor

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