Success Stories
A State Of Mind Shift From Saving To Spending
Does Anyone Ever Really Feel They Are Financially Secure Enough To Retire?
Retiree Names: James and Kim Retiree Ages: 62 and 59
James and Kim are a husband and wife with a disabled son in his mid-20s. James was the sole income earner and carried the weight of making sure his family would be financially secure throughout each of their lives while Kim was in charge of taking care of the family as a whole. They have successfully accumulated approximately $2M in investments. Now James and Kim are nearing retirement and are concerned about how they will be able to sustain their standard of living. They have worked hard all of their life to build their wealth and are especially sensitive to their disabled son’s specific needs. Now what?
James And Kim's Concerns
Being in their early retirement years with added family responsibilities, they came to us with the hope to not only retire comfortably, but to make sure their family would be financially secure, no matter what. Overall, their challenge was shifting their mindset from saving and accumulating wealth to spending while maintaining their wealth. Some of their key questions and concerns included:
We’ve lived an above average standard of living while working. Can we sustain that same standard in retirement?
How do we ensure our disabled son will be financially secure now that we are retired?
We feel disorganized with multiple professionals handing different aspects of our portfolio and financial plan. Can you help us coordinate and feel less stressed?
Our Thoughtful Approach
We were able to work together through the planning process to give them a clear picture of their current financial life, and more importantly, prepare a plan that would allow them to retire the way they would like. One big takeaway from the planning process was shifting their outlook and investment philosophy away from wealth accumulation towards distribution. We accomplished this shift in mindset by doing the following:
EDUCATION: Education on the structural differences of investment strategies during accumulation years (working years) vs distribution/retirement years is a key aspect of financial planning when preparing for retirement. As with all of our clients, we provided James and Kim with a detailed portfolio analysis that stress-tested their portfolio along with the impact it would have on the following:
- Drawing down in the early phase of retirement
- Drawing down a portfolio during a prolonged down market
- The impact the portfolio will have on continuing to provide income while keeping up with inflation.
VALUES BASED PLANNING: Working with clients, like James and Kim, it is important to help them envision and create a defined picture of the ideal retirement as led by their most deeply held values. In addition, establishing their financial goals based on personal fulfillment in their terms, gains a certain unmatched peace of mind leading to ultimate satisfaction during their retirement years. We were able to successfully help define James and Kim’s goals with better clarity giving them a true ideal vision of their perfect retirement. This would become the basis of their overarching financial plan.
LEGACY PLANNING: Creating clarity along with education and awareness was the needed path in helping James and Kim create a plan on how to leave their wealth to their disabled son and loved ones in a manner consistent with their beliefs.
The Results
James And Kim Successfully Shifted Their Mind Set And
Achieved A Stress-free, Financially Stable Retirement
We created an overarching financial plan that gave James and Kim a true shift in their mindset, freeing them from worry and allowing them to feel financially secure and comfortable, so that they were able to truly enjoy their retirement.
We structured their accumulated wealth in a way that was geared towards preserving their accustomed lifestyle, while also ensuring that they could maintain that lifestyle in future years, against the impact of inflation. They were also confident knowing that their portfolio was specifically designed to significantly reduce the big risk of a lasting market downturn on the portfolio during their early retirement phase.
In addition, we freed up their time from having to coordinate between their CPA, investment person, and attorney, etc. We created an overarching plan that led our clients' best-in-class subject matter experts, including ourselves, accountable to ensure that their plan had the highest probability of success. After designing their estate plan, which solved the missing clarity needed, we jointly met with an estate attorney that created a special trust for their son according to James and Kim's wishes. Along with protection from possible creditors, predators, divorce, medical expenses, and excessive taxes, we also ensured the ability to provide financial security to their son for the rest of his life. This gave them more freedom and peace of mind to enjoy the things that mattered most.
Lastly, we helped them understand that their plan will evolve over time. Going forward, we will help advise and ensure that their goals stay on track, be proactive in their financial life, and help them make better financial decisions going forward.
In summary, when it comes to our personal lives, the economy, laws, and regulations, change is inevitable. With life as precious as it is, we are honored to be in a position to successfully guide clients like James and Kim through their retirement, so that they can focus on more fulfilling things in their lives, more important than money.
*This is a case study and is for illustrative purposes only. Actual performance and results will vary. This case study does not constitute a recommendation as to the suitability of any investment for any person or persons having circumstances similar to those portrayed, and a financial advisor should be consulted. This case study does not represent actual clients but a hypothetical composite of various client experiences and issues. Any resemblance to actual people or situations is purely coincidental.
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