Case Study: Recently Retired

Recently Retired Case Study – Overview

Goals

Dennis and Ann had recently retired and wanted to move from California to Georgia to be around their grandchildren in retirement.

Their youngest child was going through a divorce and they wanted to help fund a college savings account for their grandson.

They wanted to travel abroad, especially all over Italy where their parents grew up.

As a recently retired teacher, Ann wanted to continue to teach or tutor in some capacity and Dennis wanted to volunteer through his church and also continue to donate to his favorite charities.

Challenges

With so many goals after being recently retired, they weren’t sure whether they could afford to do everything they wanted. They were concerned about spending too much and not having enough to last them throughout retirement.

With Dennis approaching age 67, he needed to determine what Social Security strategy to take.

Ann also had to make a decision on her CalSTRS pension option and knew that this would also affect her social security benefit in the future.

They worked with a financial advisor, but they knew that he didn’t provide financial planning services and they also weren’t sure whether their existing strategy was best for them and they felt like this was a great time for a second opinion.

Analysis

During our RetireNow™ Checkup, it was clear that cash flow planning was their biggest issue. Our first priority was to determine the best pension option for Ann and coordinate this decision with both of their Social Security benefits.

The next step was to quantify all their goals so we knew what could fit in their budget. Then we created a tax-savings plan to maximize their income to help them address all of their goals.

We spent a lot of time focusing on what was most important to them in prioritizing their goals. It became quickly apparent that their grandkids’ welfare was at the forefront of their minds.

Solutions

The worry and stress around the uncertainty of whether Dennis and Ann would be able to accomplish all of their goals was draining the joy from being recently retired. We turned their uncertainty into confidence by:

• Running different pension scenarios for Ann’s pension and calculating how much the Windfall Elimination Provision (WEP) would reduce her Social Security
• Developing a Roth Conversion strategy coordinated with retirement account withdrawals ensuring they paid the least amount of tax
• Formulating an exit strategy from high fee investment products to a consolidated low-fee portfolio significantly reducing investment fees
• Determining a workable budget for their new home purchase, annual trips to Italy, charitable donations and 529 plan contribution amounts for their grandchildren

Outcome

Dennis and Ann now live in their beautiful new home in Georgia where they spend much of their spare time with their grandkids. They feel good knowing they can accomplish their travel goals while also helping secure their grandchildren’s education.

Ann still works as a substitute teacher and knows that she can work as much as wants knowing they have enough financial resources to live the recently retired life they want.

Dennis and Ann both spend a lot of their spare time volunteering for their favorite charities and they feel secure knowing that they can still afford financial donations and accomplish the rest of their goals after being recently retired.

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