Mike and Mary
"We need to get organized."
- Mike and Mary realize that they are in a fortunate situation. They both have pensions and have been consistent savers.
- They recognize they have resources for income in retirement, but they want to know how to optimize it.
- What order should they take income from- pensions, Social security, investments?
- Maintain lifestyle, enjoy time with family, 1-2 trips a year.
- Leave money for their children
- Mike worked for small business that had union employees. Mary worked in the public sector.
- Both had retirement plans - 457 plan and a 403(b) plan.
- Will retire at 66 which is their Full Retirement Age of Social security.
Areas of Focus
- Retirement income plan
- Maintaining investments since they have adequate income
- Future tax consequences
How We Helped
Gathered all their information in preparation for taking them through our process – The Retirement H.E.A.L.T.H. Stress-test©. Since they both had pensions along with Social security, we wanted to test distributions strategies to understand any potential gaps and tax liabilities.
Through this, we learned two important things:
- Both pensions now, Mike claims Social security now and Mary delays until age 70 proved to be best strategy.
- They will have more income coming than they need when they reach age 72. This created a tax problem.
Once the income strategy was in place, we discussed the benefits of Roth conversions. Please see visual for hypothetical benefit to Mike and Mary.
These strategies need to be addressed on an annual basis. We have created a checklist to follow.
The Retirement H.E.A.L.T.H. Stress-test
Our modern financial planning process allow us to collaborate together so you can see the bigger pictures. This process was designed with you mind.
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