Couple Seeking Second Opinion on Investments

A business acquaintance of one of the executives at Heritage Financial referred this couple to us. They were looking for a second opinion on their investment portfolio and verification of their ability to retire comfortably.

The Situation

  • Married couple with 3 adult children
  • Founders of a medical center; practicing physicians
  • Concerned about financial independence in retirement while maintaining current lifestyle
  • Non-diversified investment portfolio with high interest rate risk in long-term bonds
  • No estate plan
  • Significant future federal estate tax liability
  • No life insurance; under-insured for excess liability coverage
  • Well established relationship with an accountant

Our Approach

  • Planned their cash flow to help verify their level of financial independence for retirement
  • Analyzed investment risks including a detailed bond analysis
  • Constructed a well-diversified portfolio with exposure to stocks, bonds, alternatives & private equity
  • Maximized the asset location of tax inefficient investments
  • Funded back door Roth IRA contributions
  • Established a Roth IRA for the eldest child from his summer wages
  • Recommended increasing umbrella liability coverage to more closely match assets at risk

Collaborating with Specialists

  • Recommended an estate attorney to create an estate plan
  • Introduced client to a specialist to evaluate life insurance needs. Acquired a second-to-die policy to provide liquidity for estate taxes
  • Coordinated the establishment of an irrevocable life insurance trust with the estate attorney and the insurance agent
  • Worked with the accountant to provide investment portfolio data to help with year-end tax planning

Significant Results

  • Increased confidence to retire comfortably
  • Well diversified investment portfolio
  • Assets better located and protected from outside risks and taxation
  • A plan in place to fund future estate taxes
  • Adult children engaged in financial planning and education with the Heritage team