The Situation
John and Susan are getting close to retirement and wanted to know where they stood and what are viable options for them. We had a few meetings to determine a “dream retirement” for them that allows us to figure out how much that they could spend from their retirement savings. They also wanted to make sure and have the ability to give to charities on annually.
The Approach
John is a successful engineer in the oil and gas industry. They have built a very substantial net worth due to high career earnings, investments in the oil partnerships, and being very frugal with their spending. They had several different investment accounts with different brokers/advisors over the years that had also compounded to significant values.
The Results
Susan and John’s plan:
We did a discovery meeting to gather all of their financial information to get a much better idea on their current net worth and income
This gave us an idea on how much more they were needing to save in retirement and investment accounts
We then cleaned up and consolidated the various other investment accounts from over the years
We were able to consolidate the accounts above in John’s 401k which allowed backdoor Roth conversions to fund more for retirement
John’s 401k plan also allowed for mega backdoor Roth conversions to super charge his savings rate for his retirement
We then made sure to get them out of high cost mutual funds that also led to significant tax savings due to the amount of capital gains that the mutual funds were generating in taxable accounts
We utilized direct indexing to help lower their tax bill due to gains generated from the converting of mutual funds to ETFs that are a much more tax efficient vehicle
We funded Donor Advised Funds to help fund their annual charitable goal instead of them using cash. We were able to fund by using stock positions that had low cost basis to help keep their tax bill low
This review gave them an eye opening experience on how far or close they were to their goals. They were closer to their goals than they realized, but they still needed a plan to give them the confidence on their next step of life.
The Situation
Elizabeth and John are both very successful and starting to hit their prime earning years putting them in the higher tax bracket status. The amount of income that they are generating has caused a good problem for them, but they are unsure how to efficiently use this money to achieve their goals.
They have one child and are expecting their second in the next six months. Elizabeth did rack up over $200,000 in student loans while in medical school and would like to figure out how to get rid of this burden while still building for a retirement.
The Approach
Elizabeth and John know they need an advisor to help hold them accountable, but also to help them understand their finances better. They really haven’t had anyone in their life take the time to teach her what to do with their money.
They feel so much anxiety around their decisions on how to spend their money. They know they need an advisor who will help automate their savings in a tax efficient way, pay off her remaining student loans, save for a downpayment, and invest for the future.
The Results
The plan for Elizabeth and John helped relieve some of the pain points in their lives:
We reviewed their workplace benefits and created a plan to make sure they were fully taking advantage of the benefits being offered at work.
We created a reverse budget for them that automated their savings and investments first
We reviewed their current allocations to all of their accounts to make sure that they were maximizing earnings in a tax efficient way
We helped them understand how much and what they should be investing in with her retirement accounts inside and outside of work
How and how much to save for the future home on a monthly basis and when they would be at the point to afford what they want
We came up with a plan to refinance the private student loans since they were high interest and showed her how much to pay towards them every month
This process allows them to now see everything more clearly and actually plan to keep them on track for their goals. Elizabeth and John had always felt anxious about money and were not sure how to utilize their money in the best way to accomplish their goals. After seeing the plan they finally feel good about where they stand. They realized they were actually doing a lot of things right, but they just needed some help to do the things she never learned about.
Now within the next three years they will have her student loans paid off and the ability to build their family home while still staying on track for a successful retirement.
