Meet Lucy & Richard

Their Story

Lucy is a retired physician and Richard a retired engineer. They have two kids, four grandkids and one more on the way. They dedicated most of their married life to raising their children, giving them a loving home every opportunity possible. Along the way, they traveled modestly, volunteered in their community and were prudent with their money. They saved diligently every year, even small amounts early in their marriage with a baby at home and Lucy still in medical school. The pennies became dollars, and now they are retiring with a comfortable nest egg.

Retired Couple

The Challenge

Lucy and Richard both recently retired from fulfilling careers. Up to this point, they felt that managing their finances was not very complicated. With their recent retirement, they are looking for a financial partner to guide them successfully through their retirement years. They know they can’t afford to make any critical mistakes at this stage in their lives. Their top priorities are making sure they don’t run out of money, minimizing taxes, and implementing an investment plan that they can feel confident in.

The Plan

Step 1

Their house is the family home that their kids grew up in. They refinanced a few times when rates dropped, so they still have a small outstanding mortgage. The first move in the plan will be to pay off the mortgage and do some remodeling which will allow the house to be their forever home.

Step 2

Review cash flow to determine their essential expenses, and implement a Life Driven Allocation to protect their essential expenses from the ups and downs of the stock market. This gives them the peace of mind that they will have the essentials covered, with the remaining portfolio invested for growth.

Step 3

Engage in a multi-year tax planning process to minimize lifetime taxes. After retiring from their high income careers, they are suddenly in a lower tax bracket. They have nearly a decade before RMDs and Social Security benefits will put them back in high tax brackets. Annual Roth conversions will help them shift taxable income from future high tax years to the current lower tax brackets years, minimizing their lifetime tax liability.

The Result

Lucy and Richard are enjoying their retirement and love being grandparents. They travel regularly to visit their daughter and her family in Seattle, and their son and his family in Denver. The kids and their families all converge at Lucy and Richard’s home for the holidays for a fun, chaotic time full of games, gifts, great food, and love. It is everything Lucy and Richard worked hard to achieve.

As for the money? They don’t worry much about it. They have a plan to protect them from bad stock markets and unforeseen expenses. They have put money aside to help their grandkids with future education expenses. There is just enough left over that they can treat everyone to a big annual family trip. Last year they went to Disney World. This year, they’re headed to Hawaii!