We Think We’re On the Right Track But Are We?

John and Julie were 43 years old when they were introduced to us by a current client.

  • They had eight and six-year old children but had not established a college savings plan
  • Aside from a $200K mortgage and a small auto loan they were debt free
  • 401K savings ($350K)
  • Roth IRAs worth a total of $150K
  • Yearly income of $225K (considered affluent)

They had a few concerns, and wanted to have an open discussion with an advisor they could trust.

Questions and Concerns
  • Overall, how were they doing? Do they have “enough” money? And what is “enough?”
  • John has a new job and concerns about his old 401K fund; how to manage his increased salary
    and how to fund his new 401K plan
  • How do they start funding their children’s education? Did they wait too long?
  • They are young; how are they doing compared to others in a similar financial situation?
  • When can they reasonably retire? It’s been a dream to retire at 60.

We met with John and Julie and had honest discussions about their family, current lifestyle, short and long term goals and answered all their questions. We also went through a few exercises that helped ensure our recommendations would match their long term goals.

  • Determined their risk tolerance using the Steward Riskalyze ® tool questionnaire
  • Implemented a value clarification exercise to ensure financial decisions matched family values
  • Reviewed their current assets and liabilities including funds associated with the 401K savings, Roth IRAs, mortgage interest rate, tax return review, monthly expenses and current savings rate

We then developed a unique financial plan to help them stay on track.

  • Household balance sheet created to help quantify best practice for spending vs. saving in their unique situation
  • Education fund strategy with options based on selection of public or private schooling
  • Cash flow model with projections through retirement that included John’s new additional contribution in salary
  • Used a computerized mathematical technique (a Monte Carlo simulation) to help project and quantify the probability of a financially successful retirement
  • Identified savings needed to meet early retirement goals
  • Reviewed insurances to determine appropriate coverages and policy types

John and Julie are now both 50 and here’s a look at what they’ve accomplished:

  • Have a financial plan that helps monitor staying on track to meet their own goals including retirement goals
  • Are receiving investment recommendations coordinated for the whole portfolio
  • Retirement assets are separate from current taxable money to meet goals
  • Receive 401k recommendations that are matched with their other asset considerations
  • Portion of salary increase going to fund 529 education accounts
  • They have a personal relationship with an Advisor that cares and will continue to support them and discuss adjustments as life changes

Are you in a similar scenario? Contact us for the full case study or to discuss your unique situation.

This case study is hypothetical but based on real client situations


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