Case Study
Mr. & Mrs. Young want to retire in 1 year ...
Note: This is a hypothetical scenario. Mr. & Mrs. Young are not actual clients of Mission Financial Group. Their results should not be construed as a guaranteed outcome.
Scenario
Mr. & Mrs. Young | 62yrs old
Retirement/Savings | $1.5M
Mortgage Balance | $200k
Questions
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When to claim Social Security?
Can our investments be improved?
Does an annuity make sense for us?
Should we buy LTC insurance?
What if one of us dies early?
Goals
Annual Travel | $15k/yr.
Renovate Kitchen | $50k budget
Maintain Lifestyle | $10k/mo.
The Retirement Master Plan
Our 7-step process is designed to help families cover all their bases in retirement.
A complimentary meeting with you will help us both determine if we're a good fit.
If we mutually decide to move forward, we'll walk you through our process and help you establish security and freedom in retirement.
GET ORGANIZED
1
STEP
Wisdom in knowing your numbers
QUESTION
Can you help me understand my various accounts and numbers?
PROCESS
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Organize financial numbers
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Backup important documents (vault)
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Discuss initial questions
RESULT
For the first time, the Young family had a clear picture of their money. This brought them a sense of confidence. Now they could finally make informed decisions and concrete plans.
INCOME PLAN
2
STEP
Core Income = Expenses = Security
QUESTION
How much can we spend in retirement and will it last?
PROCESS
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Establish *guaranteed income for basic expenses
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Ensure core income increase
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Ensure a surviving spouse has sufficient income
RESULT
Because "core" income was hard to define and organize for the Young family, it was a significant milestone for them to gain clarity that consistent income would cover expenses. The Young family felt confident they now understood their options and explored various scenarios.
*Guaranteed income is based on the claims paying ability of the issuer.
DEBT PLAN
3
STEP
Good Debt vs. Bad Debt
QUESTION
How and when should I pay off debt?
PROCESS
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Refinance high-interest rates & shorten terms
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Strategically utilize lines of credit
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Implement acceleration strategies (line of credit, chunking, prepayments)
RESULT
After establishing their debt plan, the Youngs feel they have evaluated and decided on an optimal strategy to use leverage and reduce debt in rain or shine conditions.
INVESTMENT PLAN
4
STEP
Optimize Investments
QUESTION
Can our investments be improved?
PROCESS
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Establish a target investment speed
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Implement a disciplined investment process
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Discuss changes to optimize and enhance strategy
RESULT
Portfolio investments were adjusted to incorporate a disciplined and thoughtful approach that was appropriate to the Young family's new retirement season.
TAX STRATEGY
5
STEP
Build tax-advantaged wealth
QUESTION
Can we save on future taxes?
PROCESS
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Analyze current tax efficiency
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Develop a schedule to build tax-free wealth
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Explore most common tax strategies
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Optimize tax efficiency in investments/income
RESULT
The Youngs knew they could do more to lower their lifetime tax bill, but had no idea where to start. After learning about the value of tax-free accounts, they were eager to reposition their assets into strategies that could save them from tax surprises in the future.
CONTINGENCY PLAN
6
STEP
Expect the unexpected
QUESTION
Do we need insurance or long term care protection?
PROCESS
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Discuss the cost and risks of a health event
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Establish an LTC plan (traditional, hybrid, out-of-pocket)
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Establish resources for an economic crisis
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Implement a strategy that protects the family
RESULT
The Youngs were always afraid that a major health event could wipe out their entire life savings. They felt confident that they had a plan for the worst and would receive a high level of care.
ESTATE PLAN
7
STEP
Generosity = Legacy
QUESTION
Will our family be ok when we're gone?
PROCESS
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Establish/review current trust documents (diagram how assets will be transferred and taxed)
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Create a tax-efficient gift plan for charities (gifting schedule for donations, education accounts, gifts)
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Plan a generous legacy for family
RESULT
After securing their own financial plans and income, the Young family felt confident about making plans to bless their own family as well as the charities they cared for. The estate and gift planning process was especially fulfilling, knowing they were financially secure and could afford to give generously.
