The Summers* Family: Carol, 55; Derrick, 58, Jessica, 26 and Tony, 24. Carol is in the medical field, and Derek works in manufacturing – both work for others. After accumulating some wealth through various investment accounts and with both adult children working with no immediate need for financial support, the Summers now want to focus on and plan more for building their retirement assets.
Derek plans on retiring from full-time work in five years and possibly do some consulting, at which time Carol would also like to retire. However, they don’t know if they will have enough saved to support the lifestyle they want in retirement to retire completely.
Their investment accounts include 401(k)s from their employers, stock options, an ESPP, and multiple brokerage accounts. Additionally, they have two whole life insurance policies and one annuity product which they have never understood.
The Summers have a modest mortgage balance and look forward to spending more time with each other, family, and friends in retirement. They are beginning to develop a list of areas of the country that they would like to relocate to during retirement that could reduce their taxes.
Carol and Derrick both craved a better plan that would allow them to retire confidently but had more questions than answers:
- How is their money invested, and are they taking the right amount of risk in their investments?
- What are the tax implications of selling Derrick’s stock options?
- How would potentially working part-time in retirement impact them financially?
- How much should they plan to spend each year in retirement?
- How do they make sense of the annuity and insurance products they have?
- What should they plan on for medical insurance costs once they qualify for Medicare?
- How can they help their kids start securing their financial futures because they will not listen to their parents?
They knew seeking professional financial help was the right choice to ease their minds and create a plan that truly worked for their family.
TAMMA FAMILY OFFICE EXPERIENCE
- The first step for Carol and Derrick was to sit down with TAMMA so we could actually listen to their questions, concerns, and the understandable mixture of excitement and uncertainty when it comes to a retirement transition. Carol, especially, wanted to be heard and not sold.
- Once their goals were clearly documented, a personalized wealth management plan that aligned with their current needs and future priorities could be created.
Working together with Carol & Derrick, we were able to:
- Establish a retirement timeline that included future financial changes (social security, Medicare, moving, and scenarios that included part-time work.)
- Identify a spending plan during retirement that could adjust to their changing needs.
- Adjust their asset allocation to an acceptable risk level that would continue to increase their savings and support their goals in a tax-efficient investment strategy.
- Reduce potential taxes through the systematic sale of Derrick’s stock options.
- Eliminate the complexity of the old annuity and insurance products that significantly reduced investment costs.
- Introduce them to a qualified estate planning attorney to draw up the necessary trust/will/power of attorney documents, including putting their children’s inheritances in trust to protect their inheritance in case of lawsuits or potential divorce.
- Schedule time with each of their kids independently to begin building their individual financial roadmaps.
- Utilize the TAMMA client portal for the Summers, an easy-to-use personal finance tool to organize and guide their spending and savings plans and give them everyday visibility for financial clarity.
With a plan in place, Carol and Derrick can rest assured they can have the retirement they envisioned, and the peace of mind that comes along with it.
* All names have been changed. A client or prospective client should construe no portion of the content as a guarantee that he/she will experience the same or certain level of results or satisfaction if TAMMA Capital is engaged to provide investment advisory services.