I recently had a meeting with a couple who came to me wanting a review of their investment portfolio.  They wanted to get my opinion on whether or not they were well positioned for they’re pending retirement.  They shared with me that they were set on retiring and needed to make things work with what they have.

So, we arranged a meeting to review what they had and I gave them the opportunity to provide me with some insight into who they have been working with, why they invested the way that they did and what they felt the purpose of the money they have is going forward.

The portfolio they had was typical of what we see.  They had a handful of mutual funds totaling over $1.2 million scattered amongst different IRA’s and 401k’s along with some cash in the bank.

They shared with me that up to this point they have not paid much attention to the money since they were working and didn’t need any of it.  However, now that they want to retire, they felt like they need to see if what they have will take care of their retirement needs.

So, we proceeded to discuss their vision of what their retirement will look like and how much money they felt they would need each year to fulfill their lifestyle goals.  They didn’t have any specifics written or thought out so we worked through their cashflow over the next few years to get a clear understanding of what we were trying to solve for.

They were both 62 and when I asked about health care, they both said they would need to purchase health insurance since they wouldn’t have any coverage’s after they retire.  After checking with our health insurance resources we added the cost of the premiums to their cash flow needs for the next 3 years before Medicare coverage begins.

I then asked them about social security and they didn’t know much about their options so we got them set up to access their benefits online and consulted with our social security resources about their choices.  We determined that it would be best for him to begin his benefits and she take a spousal benefit while her benefit continued to accrue.

He was fortunate enough to have a pension that he was eligible for which helped meet their income goals.  However, the pension only covered his life and not his wife if he dies. So, before we got into how to handle their investments to fulfill their cash flow needs, we discussed the fact that if he dies, his pension goes away and her social security goes away (since hers was less than his).  This would result in her needing to draw additional money to cover her lifestyle.  While this would also impact him if she were to die first, he said he wasn’t concerned since he could adjust his budget to reduce his income needs.  So, we focused on making sure she was taken care of if he died and determined that this would be satisfied best through the use of a specially deigned life insurance policy.

During this conversation we also discovered that they had no legal work in place.  They have three kids and eight grandchildren that, when asked, they had a desire to leave money for at their death.  So, we brought in our legal team to work through the particulars and got their generational estate plan in place.

She mentioned during the meeting that her mother was in a nursing home and it was important to make sure they had this factored into the planning.  We determined that by using a combination of life insurance with living benefits and a long-term care policy that we could efficiently cover this exposure for them.

Once we had all of this ironed out, we then began to discuss how to position their money to meet their current and future needs for income.  Out of the assets they have, a portion of the assets were dedicated to fulfill their current income need and we repositioned some money for fulfilling future income needs and then the remaining funds were used to fund specially designed life insurance and long term care policies.

We brought in our tax advisor to help with determining tax liabilities and how their social security would be affected with the amounts being received from their investments and pension.

As you can see, this couple had several areas of their life that needed attention and we completed a fairly comprehensive plan design for this couple to get them prepared for retirement.

Our goal through out the process was to help them meet their goals without gaps or omissions in their planning. This plan took care of…

  • Their current and future income needs using programs focused on income.
  • Positioned cash to be available if they needed it for big ticket purchases or other unforeseen needs.
  • Generational and estate goals were being met through their legal work and life insurance.
  • We covered their possible future long-term health care cost through different forms of insurance
  • Determining their social security and pension options to help them make an informed decision.
  • Their short-term need for health insurance before Medicare kicked in.

It was a fairly routine case for us but what I am always appreciative of is that from the clients perspective, this is all new to them and what we were able to do for them provided peace of mind and security in every area of their financial life.

The client came in thinking they just needed to make sure their investments were ok when in fact they needed a comprehensive financial plan developed.

You have heard me say it over and over again.  You only know what you know.  And what you know and what you believe to be true may not be true at all.

I see too many people meeting with a local broker or insurance salesman to buy a product thinking a product is their solution.  The truth is its not!  There is more to all of this than picking a few mutual funds or buying an annuity.

If you have been thinking about developing a plan for yourself or have a question about what was covered today let me know.  We have helped thousands of people think through their situation to make the most of what they have.

Good Luck!


Securities offered through Kalos Capital, Inc., Member FINRA/SIPC/MSRB and investment advisory services offered through Kalos Management, Inc., an SEC registered Investment Advisor, both located at11525 Park Wood Circle, Alpharetta, GA 30005. Kalos Capital, Inc. and Kalos Management, Inc. do not provide tax or legal advice. Skrobonja Financial Group, LLC and Skrobonja Insurance Services, LLC are not an affiliate or subsidiary of Kalos Capital, Inc. or Kalos Management, Inc.