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Maximizing Financial Effectiveness In Retirement

Dan and Linda

Dan and Linda

Sample Case Study for Nearing Retirement


66 and 68


Retired - Wanting to Optimize Their Financial Plan for greater confidence from an Effective Withdrawal Strategy, Lower Taxes, and a Longer-Term View of Their Finances

The Challenge:

Dan and Linda have investments in ROTH and traditional IRAs, as well as a substantial taxable portfolio and a vacation home. The combination makes it difficult for them to know they are using the most effective overall financial strategy.
They expected their income taxes to go down in retirement, but they do not feel this has happened. With required minimum distributions from a substantial IRA starting in a few years, they aren't sure what steps to take to help lower income taxes.
They would like to make annual gifts to their three adult children, or possibly begin transferring the vacation property to them, but don't know if this is wise, given that they expect many additional years in retirement.
They would like to travel more, but are concerned they may be spending more than their investment assets can support.

The Positives in Dan and Linda's Situation:

Their home is paid for.
They have substantial investment assets.
They are open to ideas that would bring them greater security and financial confidence. 

Where to go from Here?

An integrated financial plan that assesses the maximum annual spending their investment assets could be expected to support.
Scenarios within the financial plan to contemplate additional travel and annual gifts to their adult children, without compromising Dan and Linda's long-term financial security.
An effective investment strategy that reduces costs, generates cash flow for annual withdrawals and provides the potential for longer-term growth.
A tax-reduction strategy to help lower ongoing federal income taxes.
An ongoing evaluation of the effectiveness of converting traditional IRA dollars to ROTH IRA for tax-free future withdrawals.

How we helped Dan and Linda:

An integrated financial plan that ties Dan and Linda's strategy together to improve effectiveness and help them strategize.
Adjust their portfolios to more closely reflect their goals.
Add assets besides just stocks and bonds to create a more effective investment strategy.
Finalize a strategy that includes extra dollars from their portfolio each year so they can travel while they are still young.

In Summary:

Dan and Linda know they are taking steps to reduce income taxes.
They have an adequate budget to allow for travel each year to new destinations.
Dan and Linda have confidence in knowing they have a strategy designed to support their long-term retirement goals on their terms.
They make gifts from time to time to their adult children.

These examples are hypothetical and for illustrative purposes only. The rates of return do not represent any actual investment and cannot be guaranteed. Any investment involves potential loss of principal.

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