Martin and Eleanor are both 70 and have retired from successful careers as executives. They’re enjoying good health and stay active in their church and community. They also love to travel and spend time with their grandchildren, sometimes babysitting. They have three well-educated adult children; two are very independent, but one often asks for financial assistance.
Eleanor and Martin have paid off their home in central Oregon and would like to leave it to their children—they see it as a legacy of so many good family memories. They’d also like to give money to their grandchildren, but only for education. Ideally, they’d also love for their children to become active community supporters.
Financially they’re quite stable, but not sure how to maintain their wealth. The company stock they own (from their previous jobs) keeps increasing in value, but other investments are doing poorly and never seem to grow.
Martin doesn’t like to focus on financial matters even when his advisors attempt to simplify the information and show him how it all works. Eleanor takes an active interest, but has little focus; she wonders if maybe they should buy some Apple stock.
Some of their main questions are: “Where should we draw money from to live on? Do we need to start taking funds from our retirement plans? Ideally, where will our retirement income come from?” We would help them by:
- Modeling a future scenario to confirm they have sufficient funds throughout their financial planning horizon
- Running alternative scenarios to determine how much additional money they could afford to spend each year, and how to adjust financially if one of them develops a debilitating disease such as Alzheimer’s
- Explaining how much money they can give away safely without worrying about income
- Organizing their finances so that each of them understands their sources of income, knows how to how to locate information, and realizes what financial steps they’ll need to take should one of them pass away
- Reviewing investment performance to determine what their returns have been and how much risk was involved in obtaining the returns, then helping them realign their objectives and reposition assets appropriately
- Adjusting their asset allocation to account for the required minimum distributions from their IRAs Discussing alternatives to fund their grandchildren’s education
- Discussing various estate and tax planning strategies that, separately or in combination, could include:
- Putting their central OR home in a trust so they can easily gift a portion to their children each year
- Putting appreciated stock in a donor advised fund that would allow the children to give away money each year so they understand how important it is to support and learn about their community
- Directing appreciated assets to a Charitable Remainder Trust to provide an income stream and spread the capital gains over several tax years