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Retired and Life Happens

Steve & Janet | Ages 75 & 72

Steve and Janet's journey toward a stable and fulfilling retirement was about to take a different turn. After a life of hard work and careful saving, they’d built a modest but comfortable financial foundation. Steve, a former business owner, sold his firm six years ago, and he and Janet have been savoring life within their means, enjoying the company of their three grown children: Jennifer, Laura, and Kevin.

But over the past several years, an unexpected challenge emerged. Steve, who had always overseen their finances, began showing signs of Alzheimer’s and was recently diagnosed. Managing their finances—from paying monthly bills to overseeing investments—had always been his domain. Janet, capable yet uninvolved in the financial details, had trusted Steve’s judgment and passion for managing their money.

Now, facing this new reality, Janet recognized the importance of stepping up to manage their financial path forward. After consulting with a few friends, she received a recommendation from her friend Evelyn to speak with Willett Wealth Planning. With Steve’s blessing, she and their oldest daughter Jennifer reached out to us, beginning a new chapter of partnership and guidance.

During our introductory call, Janet shared her concerns and hopes. She needed guidance to navigate her financial responsibilities with confidence, especially with Steve’s condition changing their needs. Together, we assessed her goals, cash flow, and assets, looking at each piece carefully to build a plan that Janet could feel secure about.

Guiding Janet Through Their Financial Picture:

1. Cash Flow

Steve’s Social Security income brings in $3,200 per month, and Janet’s is $1,600.
They receive $100,000 per year from the structured payout on Steve’s business sale, with six years remaining on this income stream.
Janet’s expenses are around $13,000 per month, and while they used to envision travel and other discretionary spending, these plans are uncertain due to Steve’s health.

2. Balance Sheet

Janet and Steve hold $300,000 in savings and have an investment account with $600,000.
They purchased their primary residence in 2007 for $900,000, which has appreciated to about $1.3 million. Their mortgage balance is $300,000, with a manageable 3.5% interest rate.
They own two vehicles, fully paid off and ready for the years ahead.

With these details, we worked to develop a clear, personalized strategy for Janet. Our focus is to ease her into financial management, providing her with the tools and guidance to feel confident and in control.

As her trusted financial partner, we’re here to be her guide—making it possible for Janet to focus on spending time with Steve and their family while feeling reassured about their financial future.

When Janet and Jennifer first sat down with Willett Wealth Planning, we began by creating a comprehensive financial forecast that visually mapped out their potential future. This forecast, built around their unique situation, helped Janet gain a clearer picture of how each element of their finances could evolve over time. With her daughter Jennifer by her side, Janet walked through each hypothetical scenario with us, feeling supported as she began to understand the steps she’d need to take.

As we reviewed her projections, we presented tailored recommendations to guide Janet on this new journey:

1. Bank Savings

Janet noted early on that she wasn’t sure why Steve had kept so much in the bank. We recommended she decide on a comfortable balance for cash reserves, suggesting that $100,000 would provide a sufficient cushion. The remaining cash, we suggested, could be invested in a diversified portfolio more suited to their long-term goals.

2. Annual Business Sale Payout of $100,000

With six years left of payments from the business sale, Janet was concerned about what would happen once those payments stopped. In our financial plan, we demonstrated that their accumulated savings could comfortably cover their expenses when this payout ended, providing her with peace of mind that their retirement lifestyle would be secure.

3. Investment Account at Schwab

Steve had enjoyed managing this account, primarily holding stocks for the long term and selling when necessary. After assessing Janet’s tolerance for risk, we determined the portfolio was too aggressive for their current needs. With Steve and Janet’s approval, we began the transition to a fee-based managed account with our team, and, after consulting with their CPA, devised a gradual three-year strategy to shift toward a more conservative portfolio. Additionally, we rolled over Steve’s three old 401(k) accounts into a fee-based IRA. This move allowed for improved asset allocation, better aligned with their goals, and positioned them for a sustainable income distribution strategy in the future.

4. Taxation Considerations

Since all of their savings are after-tax, Janet and Steve find themselves in a unique, advantageous position. Without required minimum distributions (RMDs) to worry about, they’re less vulnerable to rising tax rates in retirement. We explained how this setup gave them more flexibility and discussed strategies to preserve this benefit in the years ahead.

5. Long-Term Care Coverage

Seventeen years ago, Steve and Janet had purchased long-term care policies, but Janet was unclear on the specifics of their coverage. We reviewed the policies with her and set up a call to confirm their benefits. While the policies didn’t cover everything Steve might need, Janet now understood her options and had a clearer idea of what to expect if she activated the coverage.

6. Estate Planning

Janet and Steve had portable wills but not a Living Trust. We explained the importance of establishing a Living Trust, especially given Steve’s health. This would simplify the inheritance process, protect their estate, and ease any future burdens on Janet and the family. We provided recommendations for reputable estate planning attorneys to help them get started promptly.

The Summary

With a thoughtful and well-organized strategy in place, Janet gained a sense of empowerment, realizing she was more than capable of overseeing their finances. Her confidence grew as she grasped how to approach spending, manage investments, and prepare for the future. With Willett Wealth Planning as her guide, she felt secure knowing that both her and Steve’s well-being—and their legacy—were on a solid foundation.

Case Study

Retired and Life Happens

Steve & Janet | Ages 75 & 72

Guiding Janet Through Their Financial Picture:

1. Cash Flow

2. Balance Sheet

1. Bank Savings

2. Annual Business Sale Payout of $100,000

3. Investment Account at Schwab

4. Taxation Considerations

5. Long-Term Care Coverage

6. Estate Planning

The Summary

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