AT A GLANCE
Nick and Jess are both excelling in their
respective careers and are starting to
think more about their next stage in life.
“Can Nick cut back on his hours and still be ready for retirement in 5-10 years?”
“How should our portfolio change as we get closer to retirement?”
“Should we keep the universal life insurance policies we bought?”
THE SITUATION
About Our Client’s Situation
They know they're doing well but are they making the best financial decisions they can with their money?
Nick and Jess Miller have both established successful careers. As their income and portfolio has grown, they’ve started thinking about retirement and more specifically transitioning into part-time work over the next few years before retiring completely.
Nick is a pediatrician and has experienced some physician burnout and thinks if he can cut back on his hours and spend more time during the week outdoors hiking and mountain biking, he’d enjoy his time at work more. Reduced income will result in reducing retirement savings and he wants to know how that will affect their overall situation.
Jess is a vice principal at a public high school and loves working with teens, she has fully vested in her pension and thinks that as Nick slows down at work she would consider retiring as a vice principal.
The biggest question on their mind is with their potentially reduced income, will they be able to still save the requisite amount to retire in the next 5-10 years.
They’re also curious if their investment philosophy should change with retirement approaching in the next 5-10 years.
Finally, about 10 years ago they were sold universal life insurance policies and funded those with a significant amount of money. They’re wondering if they should surrender those policies or keep them, and if they keep them, how they fit in their retirement plan.
THE STRATEGY
Our approach
THE OUTCOME
The results
With more clarity surrounding their finances, Nick has decided to cut back on his hours starting next year, reducing his weekly work hours from 50 to 32. He plans to spend the additional time mountain biking and hiking. Jess plans to work for two more years and then retire.
While reviewing their portfolio we realized they could drastically reduce the cost and complexity of their investments. With our help Nick and Jess simplify their portfolio and have more confidence in their desired outcome.
Finally, they’ve decided to surrender one of their permanent life insurance policies and keep the other. They reinvest the proceeds in a taxable brokerage account using tax-efficient ETFs, and keep the other policy to maintain the life insurance on Nick and potentially provide tax free income in retirement.
THE BLOG