A business acquaintance referred a couple looking for a second opinion on their investment portfolio and verification of their ability to retire comfortably.
Couple Seeking Second Opinion on Investments
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