Clients

THE ASK

A referred client who works for a well-known technology company wanted to make sure she was making the correct financial decisions in order to save enough for college tuition for her children, a second home, and if possible, an early retirement. She earns a significant income but had allowed a large amount of money to build up in a savings account as she wasn’t sure how to best invest it.

THE SOLUTION

We created a financial plan including projected potential future expenses and identified time horizons for when cash might be needed. This allowed us to create an investment plan for the money that was earning less than 1% in her savings account. When we did a discovery call with her 401k plan provider to ensure she was utilizing it to the fullest extent, we learned her plan allowed her to take advantage of one of the most powerful retirement savings strategies that currently exists – the Mega Backdoor Roth 401k. We helped her change her contribution percentages and updated her financial plan to reflect the dramatic change to her future wealth as the “WHY” behind this strategy.

We have found that our client is like many other high-income millennials who have a great saving mindset but “do not know what they do not know.” And they do not want to leave any opportunities on the table. Putting together a financial plan, coupled with an investment strategy, can be much more complex than millennials might have anticipated, especially given changes that can occur to their employment, retirement plans, tax laws and family dynamics. Our client has since referred us to several of her colleagues who also wanted to create a financial plan projection and learn how to take advantage of their company’s Mega Backdoor Roth 401k.

THE ASK

A prospective client who recently retired approached us to help manage their assets. They both worked for Fortune 100 companies, and each had substantial 401k assets and pensions. They were hesitant to retain the full burden of managing their wealth on their own, given the consequences of making a mistake. They wanted transparency to go online and see up-to-date information on both performance and costs and did not want to work with someone who had an incentive to push for higher-cost solutions.

THE SOLUTION

First, we created a financial plan with a cash flow model that tested several distribution strategies as these clients had the ability take their pension as a lump sum or as monthly annuity payments. We identified the time horizon and degree of withdrawals from their retirement assets and set an allocation to utilize our “active rebalancing” strategy. The non-retirement assets were not being managed in a tax efficient manner, so we made a few changes to reduce taxable income. We discussed the benefits of a different income strategy; Roth conversions, as their financial plan showed a substantial increase in taxes due to Required Minimum Distributions (RMDs) at age 72 and beyond. We set a social security claiming strategy specific to them and their customized plan and will review and update their plan yearly to keep the clients on track and continue to give them confidence in their financial decisions.

With their financial picture made clear and much more organized, our clients realized they could not only maintain their lifestyle but also begin a yearly gifting plan to their two children. We offered to run a financial plan for their children and now help invest the yearly gifts (and other assets) for them as well.

THE ASK

A new client felt he did not have the time or expertise to effectively manage his wealth. His goal was to better utilize his company stock option plan (restricted stock) and determine if utilizing the deferred compensation plan was appropriate.

THE SOLUTION

After a few meetings to review his current investments and pinpoint his long-term goals, we were able to develop a customized strategy to exercise stock options, while also deferring some compensation to be received after retirement when his income decreases. We introduced a custom index portfolio that would exclude his company stock due to his large, concentrated position while maintaining a low tracking error to the stock market. This strategy also aims to actively harvest tax losses which could be used to offset gains taken from selling some of his appreciated company stock. We also recommended a few private equity and private real estate investments that will help diversify his wealth away from just stocks and bonds. Through our multi-year relationship with this client, we have shown him the value of a client-focused investment model that focuses on investment solutions, not investment products, and a financial plan that is customized and updated yearly.

Some of the corporate employees we serve work for these companies: