Putting it all together
Learn how our clients successfully prepared for their own future while helping kids and parents at the same time
Our clients, Mike, a corporate professional, and Julie, an operations manager, ages 59 and 57, found us through a fee-only financial planner directory. The couple has two adult children. At that time, their older daughter had graduated from college and was doing well working at an accounting firm. But her expenses were high, so they still paid her car insurance and cell phone bill. Their younger child had graduated but had only been able to find part-time work. So while he lived away from home, he needed help with rent and other bills and was frequently asking for more money. They were concerned that he was not spending responsibly, and should spend more time looking for work, but seemed content to continue asking them for help. At the same time, Mike and Julie’s mothers needed more help…some financial, sometimes simply more time. They felt pressured from all sides but knew they needed to start looking out for themselves too, so they contacted us.
The couple had previously been working with a broker in a name-brand office near their home. Unfortunately, they rarely heard from him and he primarily focused on their investments. During 2008, he hadn’t offered much in the way of preventing issues since they incurred heavy losses, so they were looking for more attentive assistance.
The couple had accumulated a $1.5 million nest egg along with some rental property. While Mike and Julie both had strong incomes, the money seemed to go out as fast as it came in. It seemed that any extra money was being consumed between the kids, the parents, the rental property and other obligations.
When they first met with our team, we sat down and reviewed their situation in detail. We gathered information on what they owned and owed. We asked them about their goals. Where did they see themselves in 5 years? 15 years? 25 years? Did they want to continue working, work part-time or retire fully?
As we worked together to build their financial plan, it became clear that the big variables in their life were their kids and their mothers. To help allow for this, we included a “support” amount in their monthly budget, but also came up with a strategy for whittling down that number. We also spent some time talking with their youngest son to help him start spending more responsibly. We offered educational assistance and an outside professional perspective, which can make the process easier, as we frequently do to assist our clients.
The plan we created with them helped guide them over the next years. We worked closely with them to restructure their investments in a more diversified manner. By putting them into low-cost funds and no-fee ETFs, we were able to help them increase their return without taking additional risk. We helped them refinance both their home and their rental property.
We also helped them plan for when and how to file for social security, to maximize their benefits.
We also helped them confirm that their insurances were appropriate and helped them work with a trusted local estate planning resource to update their 20-year-old estate plan. Lastly, as part of the initial comprehensive financial plan, we developed a robust retirement planning analysis that helped confirm that they were on track for their retirement plans based on the host of assumptions that they wanted to include such as retirement timing, spending level, gifting to children and charity, support for Mom, gifting to future grandchildren for college funding, world travel, anticipated health care, etc.
It took some time, but now the couple is on track to their goals: to both retire and travel more. With our help, they were able to gradually cut back their support to their adult children, which involved our firm taking a more active role in helping their son improve his money management skills.
We talk with them frequently and continue to address their changing financial needs through frequent emails, phone calls, and meetings.