Colin & Madison

Preparing for Retirement

Primary Concerns:

  • Retiring when he wants to.
  • Ensuring his wife is taken care of in the case he pre-deceases her prematurely.

Questions & Concerns:

  • Based on my current retirement savings, lifestyle, and spending habits, what is an appropriate timeline for retirement?
  • When is the best time to take my pension and social security income?
  • Would my spouse be okay if something were to happen to me earlier than we anticipate?

Solutions:

  • All-inclusive Financial Planning
  • Construction of a Comprehensive Retirement Plan
  • Investment Management
  • Social Security Timing Analysis
  • “What If” Analysis and Stress-test for Premature Death
  • State Pension and Lump-Sum Analysis
  • Insurance Planning
  • Long-term Care Needs Analysis

Colin & Madison’s Story:

This story goes back seven years. Colin and Madison originally hired us to assist them with retirement planning, social security and pension timing, and to ensure their insurance needs were properly handled prior to any unpredictable, untimely death or dementia in the family. Colin was a firefighter and Madison worked from home, managing the household finances and raising the kids. What we didn’t know when we initially went through our Wealth Management Process was how many stones had been left unturned by the prior financial advisory firms with which the two of them had engaged with in the past.

After ironing out all their retirement planning needs, recommending the appropriate investment portfolio model, and stress-testing their plan for Colin’s potential early passing, we had just completed all paperwork and signatures in order to begin the implementation process when he stopped us on his way out of the office, saying:

<italic> “I want to ask one more question, but I’m embarrassed to ask. I used to be a police officer, and after 10 years on the police force, I changed careers and liquidated my Police & Fire Pension Fund and have the ability today to buy those years back if I want… but when I asked, the last two financial advisory firms we’ve worked with in the past both said that we should just invest all the money with them. So I expect you’d probably say the same thing, but I felt like I’d be remised if I didn’t ask you as well, before we get the ball rolling here.” </italic>

We were both shocked and concerned to learn of this news because we had (and continue to work with) several firefighters and police officers, and one of the biggest benefits of their benefits plan includes a Deferred Retirement Option Plan (or DROP, for short). So we stopped the entire transfer process and asked Colin to set up a meeting with the Police & Fire Pension Fund to get a quote to determine both:

a) What it would cost to purchase back the 10 years he’d previously spent working with the police force, and
b) Whether the re-purchase would make him eligible for the DROP, a monthly retirement pension increase, or both.

Colin and Madison came back a week later with the information from the Police & Fire Pension Fund and what we discovered was incredible. First, if we purchased back the 10+ years, it would increase Colin’s pension by a substantial amount on a monthly basis. Secondly, the re-purchase would also make him eligible for the DROP (which he would otherwise be deemed ineligible), and through buying back these prior years of service, he would be the recipient of a $500,000+ retirement check after only seven more years of service with the fire department.

The only “catch” was this: We had to use more than 90% of his total retirement savings to re-purchase the “lost” years in order to make this all come to fruition… which is exactly what we recommended and helped Colin facilitate.

So after more than seven years, in 2019 the financial plan’s encore finally took place and we were able to help them dramatically increase their retirement income, more than quintuple their liquid net worth, all while properly planning for a safe, secure, and stress-free retirement that ensured the conservative survival of their estate to the next generation.

*This story was published in Wall Street Journal’s Dow Jones Newswires in 2012. 

What’s My “Risk Number?”

Does your retirement portfolio match your long term goals. How much risk are you really taking?

 

Free Portfolio Risk Analysis

Start Your Plan Today

Whether you’re planning for retirement, managing a life transition, or concerned about the longevity of your retirement nest egg, we’re here to help.

Get Started Today

As Seen In: