High-Income Retirement Planning

A high-income professional in his late 40s wants to make certain he and his wife have the best possible plan in place for a comfortable retirement.  He also wants to ensure his three teenage children become productive and independent young adults by the time he retires.

• The professional is in his peak earning years and currently earns an annual salary of $375,000. He plans to work for another eight to 10 years in his current position.
• He and his wife have accumulated approximately $1.2 million in investments, some of which are held in tax-deferred retirement accounts that include company stock of his employer.
• The couple owns income-producing real estate worth approximately $650,000. They own this property outright.

The couple has done limited financial planning in the past, and they are uncertain how to best save and invest over the next 10 years.  Further, they haven’t clarified how they wish to spend their time in retirement. Their hope is for C.H. Dean to develop a retirement plan and help them chart a course for their future.

Dean began the retirement planning process by engaging the couple in candid conversations that covered their finances and lifestyle:

• Current income and lifestyle needs for the family today, in the intermediate term, and for the couple when they retire
• Their vision for their children as young adults
• The role they wish to play in providing financial support for their children as they mature
• How much longer they want to be landlords for the investment property, and the implications for their lifestyle when they retire

Dean then conducted a review of

• All financial accounts, including the family’s operating budget and any debt
• How existing investments are managed

The firm used this information to create a comprehensive personal financial plan for the couple that included a balance sheet. Dean strength tested the plan for long-term success under various market and savings scenarios.

Dean also reviewed an outdated will and discussed the key elements of an estate plan. They subsequently facilitated an introduction to a local estate-planning attorney to assist with updating their plan.

They also facilitated meetings with a real estate agent and attorney to discuss pros and cons of selling versus maintaining the property in the shorter term and later on when the couple retires.

Dean’s work empowered the couple in a number of ways:

• An aggressive savings plan for the professional’s remaining working years.
• This plan is supported by a personalized investment strategy that Dean developed and is implementing on the couple’s behalf. Dean is providing guidance on the company’s managed retirement plan and is directly managing the remaining investments, taking a holistic approach to managing the couple’s wealth during these crucial pre-retirement years.
• An updated estate plan that includes living wills and trusts for the couple.
• A plan to revisit the potential sale of the investment property every two years. Based on the meetings with the real estate professionals, the couple came to the conclusion that they are not yet ready to sell the property or make a firm commitment to be landlords when they retire.

One of Dean’s wealth advisors who specializes in working with younger clients met with the teenage children and introduced them to online budgeting and savings tools so that they could begin to experience saving and investing.