Case Study

Jackie entered our planning session with questions about her financial future, ready to take control and build a secure path toward retirement. Together, we crafted a comprehensive financial forecast based on her current assets, expenses, and goals, laying out a plan to ensure her dreams of a comfortable retirement could become a reality. Our recommendations served as both a guide and a roadmap, emphasizing the actions she could take to gain even greater confidence in her financial journey.

First, we discussed Jackie’s bank savings. With cash reserves above the recommended six months of expenses, she had room to redirect some savings toward retirement. Increasing her 401(k)-salary deferral percentage would not only boost her retirement account but also help lower her taxable income. We encouraged her to explore the Roth portion of her 401(k), which would create a pool of tax-free income for her future.

For her Restricted Stock Units (RSUs), we imported her vested and unvested grants into our financial forecast. Jackie agreed it was time to build a game plan for exercising her options, balancing the potential income with the tax obligations these would trigger. Knowing when to exercise RSUs can make a significant difference, both for income and in managing tax impacts over time.

Next, Jackie’s IRA from her divorce settlement came under our management, giving her access to a more aligned asset allocation and a consistent rebalance strategy. This setup also prepared her for future income distribution needs, laying the groundwork for a sustainable retirement income.

With retirement in mind, we talked about delaying Social Security until at least age 66. The extra 8% annual increase has a powerful impact, especially since her Full Retirement Age is 67.

Taxation was another essential element. Right now, all of Jackie’s retirement savings would be taxed as ordinary income upon distribution, making her vulnerable to potential tax increases in the future. By directing some contributions to the Roth 401(k) and exploring post-retirement Roth conversions, she could work toward tax-free income sources and added flexibility.

In terms of protection planning, Jackie’s current term life insurance policy would provide coverage until she turns 67. We discussed options for long-term care insurance, weighing the benefits and potential costs, so Jackie can feel secure about health coverage as she ages.
‍
Lastly, we focused on estate planning. Jackie’s current documents were last updated in 2013, shortly after her divorce from Frank, and now, with her children grown, a review was overdue. We connected her with reputable estate attorneys to update her Durable Power of Attorney and other essential documents, particularly relevant if she and Kurt were to take the next step together.

With this plan, Jackie now has a clear path toward her goals, a blend of security and flexibility to adapt as life unfolds. With each action step defined, Jackie is well-positioned to be the hero of her own retirement story, with a trusted guide by her side.

After seeing her future projected through her financial forecast, Jackie felt a new sense of confidence and excitement. With the steps we outlined, retiring at 65 now looked not only achievable but well within reach—without the need to rely on merging finances with Kurt if they chose to marry. This shift freed Jackie to focus on her future independently, knowing that any potential inheritance would only serve as a bonus, strengthening her financial picture further.

Jackie was grateful for the strategic changes we mapped out together, changes that sharpened her focus and gave her peace of mind. By adjusting her savings plan, rethinking her retirement contributions, and fine-tuning her estate planning, she had positioned herself for success and built in a flexibility to handle any curveballs that life might throw her way.

As partners in her journey, we all looked forward to witnessing her progress, confident in her bright future. Moving forward, we planned to meet three times per year to review and refine her plan, celebrating each milestone along the way.

Note: The above case study is hypothetical and does not involve an actual Willet Wealth Planning client. No portion of the content should be construed by a client or prospective client as a guarantee that he/she will experience the same or certain level of results or satisfaction if Willet Wealth Planning is engaged to provide investment advisory services.