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  • Mark Fonville, CFP®

Retirement Income Planning Helps Recently Retired Couple Maintain Financial Security [Case Study]


Case Study: Recently Retired Couple Seeks Advice On How to Create Sustainable Income

Married couple David and Mary recently retired from their fulfilling careers and are now embracing the next chapter of their lives.


They are seeking a plan that will help them continue their current lifestyle well into retirement, yet also have the security in knowing they will not experience tough financial times in the future.


They want to meet their tax burden easily, optimize their investment portfolio by making their money work for them, and create a reliable stream of income. These are their top financial priorities going forward.


THE CHALLENGE


David has given over 30 years of demanding work to his own company prior to this decision to retire and move into the next phase of life.


With his children out of home and financially independent themselves, he and Mary are looking forward to dream vacations they have always wanted, golfing more with other retired friends, and giving back to their community with some volunteer work.


David’s retirement package included a 401(k), stock options, and a pension. He would like to make these assets work more by generating more returns so he and Mary can enjoy a relaxed future focused on the things they want to do, rather than need to do.


David was not initially informed as to how he could access these funds and needed professional financial advice as to what investment options he could enter into.


David’s primary goal is to ensure that he and his wife’s financial situation remains stable while facilitating the lifestyle they envisioned for retirement.


THE APPROACH


David and Mary’s retirement planning process needed to be pleasant and hassle-free. Avoiding a stressful planning period was a priority for them.


To avoid any headaches and complications, the first step they took was to identify any potential future tax burdens.


Working together with David and Mary’s CPA, the retirement planning steps they took involved:


  • Compiling all the information David needed from his company’s benefits administrator,

  • Summarizing all the options available to David and Mary, along with being made aware of any tax burden,

  • Opening new investment/retirement accounts,

  • Devising a schedule of withdrawals to create a reliable income stream.


By taking these measures, David and Mary were able to understand all their retirement finance options. This removed much of the stress many other new retirees experience. They were able to move forward with their plans, confident in knowing that they would be well looked after.


THE RESULTS


The financial planning that David and Mary conducted proved helpful in many ways, but particularly in:


  • Being able to reduce the impact of taxes on their finances, now and in the future,

  • David’s retirement savings reorganized to help reduce risk, and

  • The couple could enjoy a predictable stream of income, without adjusting their lifestyle.


Today, David and Mary are enjoying retired life! They travel back and forth between their home in Long Island, NY, and their beachfront property in the Caribbean. They are also constantly visiting new golf courses and resorts when they can in between time spent with their young grandchildren.


The knowledge that their financial situation is secure for the rest of their lives is incredibly reassuring. David and Mary love life, as they feel it is on their terms.


David and Mary regularly review their retirement situation. New federal and state tax laws may come into effect, so it is important that they are being monitored each year to ensure they are taking advantage of any opportunities available to them and ensure they do not receive any nasty tax surprises from the IRS.


 

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