Planning for a Successful Retirement: A Case Study

This blog post highlights the importance of a well-defined retirement plan. Let's consider a couple, aged 65 and 63, who are nearing retirement in two years. They earn a combined $190,000 annually, have no debt, and possess a substantial investment portfolio of $833,000 along with a $50,000 emergency fund.

Their primary retirement goal is to generate income without depleting their principal. They aim to leave a legacy for their children while maintaining a safety net for potential long-term care expenses.

Addressing Concerns:

Currently, their portfolio is aggressively allocated with 80% in stocks and 20% in bonds. While this may have served them well, they are concerned about the risk level approaching retirement.

Initial Analysis:

Our initial analysis, using sophisticated retirement planning software, reveals an 83% probability of success with their current plan. This means they can likely withdraw $4,000 per month after taxes and maintain their lifestyle while leaving approximately $1,000,000 in inheritance.

Optimizing the Plan:

To further enhance their retirement outcomes, we explored several strategies:

International Diversification: We shifted 25% of their portfolio to international equities, reducing overall market volatility and improving long-term returns.
Social Security Optimization: We strategically delayed claiming Social Security benefits until age 70, maximizing their monthly income in later years.

These adjustments resulted in a slight increase in the probability of success to 84% and an additional $200,000 in projected inheritance.

The Power of Planning:

This case study demonstrates the value of a proactive retirement planning approach. By carefully considering their goals, risk tolerance, and financial situation, we were able to optimize their retirement income, enhance their legacy, and increase their confidence in their future.

Next Steps:

If you'd like to explore a personalized retirement plan tailored to your specific needs and circumstances, please reach out to schedule a complimentary consultation. We'll discuss your current financial situation, retirement goals, and answer any questions you may have.

Disclaimer:

This blog post is for informational purposes only and does not constitute financial advice. Case studies are hypothetical examples of the various approaches that can be taken to assist clients with their planning needs. The results depicted within this communication are unique to the case presented and should not be construed as a guarantee of future results. Each client has unique circumstances and this may not be indicative of all client experiences with our firm.