financial planning

Jamie – Age 62 Occupation : Paralegal Education: Bachelor of Science – Theatre Arts

Brian (Ex-Husband) – Died two years ago at age 64 Brian was Jamie’s best friend, even after their divorce.

“My ex-husband and I both came from very humble beginnings. We were married many years but decided to divorce in 2021. It was a mutual decision and we remained great friends. Because we systematically built our retirement assets together over the course of three very frugal decades, we decided to leave our assets to each other in our wills. Six months after we divorced, my ex-husband died unexpectedly. He never got a chance to retire, despite being a man who started working on his family’s farm at the age of 9 and subsequently became a man who worked harder than anyone I’d ever known.”

Four Adult Children (in their early 40s) Two are from Jamie’s previous marriage. Two are from Brian’s previous marriage.

One Grandchild ($6,000 529 account + $1,000/yr. contributions) + one on the way

Jamie’s parents are deceased.

Qualitative Information and Unique Planning Objectives

· Jamie wants to retire anytime between now and age 65 (within 3 years)

· She values travel.

· She lives in a “great walkable neighborhood in a very interesting, vibrant city. I love walking around in the city and having mini-adventures, as I’m curious and easily entertained.”

· Lifestyle: Health, exercise, travel, continuing education, gardening, reading, enjoying the seasons, brunch with friends.

· “I love life: I have been very fortunate.”

· She is active in the local theatre scene (as an actor) and wants to learn how to paint.

· “I’d like to travel to Europe and the American Southwest. I want to rent a convertible and drive down the Pacific Coast Highway (CA). I’d like to take a train through the Canadian Rockies. I want to see the Florida Keys and New Orleans. I want to take my grandchildren on some of these excursions before they no longer think I’m cool.”

· “I would like to know if I have enough to fund my financial goals through the end of my plan, whether my current allocations make sense from a tax-efficiency standpoint, and how to structure my withdrawals.”

· “As for me, I grew up incredibly poor – no medical care, no gifts at Christmas poor.”

· “My natural inclination is to save; I have found the wealth-building phase of my life reassuring and straightforward (if not always undertaken correctly). My issue is that, because of my ex-husband’s untimely death and the money I inherited, I feel very strongly that I need to be a faithful steward of the money, leave a legacy for our children, and loosen the purse strings enough to spend at least a little bit of the money I’ve worked so hard to save on something more than mere survival. I have an emotional need to honor what he built and give all those years of doing without in the name of “someday” – a someday that never came for him.”

· “As a result, I vacillate between worrying that I don’t have enough saved to safely retire and being fearful that if I wait too long, I will not live long enough or be healthy enough to truly enjoy all we worked and saved for.”

· “I have worked with 3 different financial advisors. 2 are available to me any time and are provided free of charge through my company’s retirement savings plan. The other was a task-based planner I hired to review my plan last year. I also have a knowledgeable friend who stepped in when my ex-husband died and has been instrumental in getting my accounts organized. He has done a great deal to help and educate me. I also listen to many podcasts about retirement and a member of several Facebook groups.

Gross Income = $63,000

· Jamie is employed part-time and saves most income into her Roth 401(k) = $30,500

· She lives off the Fidelity money market fund (Brian’s $248k life insurance proceeds) within her taxable brokerage account. She transfers ~$3,000/mo. to her checking account, plus any extra for trips, etc.

· She distributes her inherited RMDs (Eligible Designated Beneficiary - over her own lifetime - /24.4 in 2024) and reinvests them. She has historically used the Roth RMD to “fund” her own Roth IRA.

Social Security Earnings Since: <1980 Years of Earnings: 44+

Jamie is also eligible for Survivor’s Benefits on Brian’s record = ~$36,000/yr. at age 67

Living Expenses = ~$60,000 (~$5,000/mo.)

Insurance

Jamie has group term life insurance ($150,000), health insurance (low-deductible), and disability insurance (60%).

Long-Term Care Insurance: None

Real Estate = $612,000 (will become $265,000)

Primary Residence = $612,000 Details: 2 bed / 2 bath / 1,600 sqft. Year Purchased: 2015 (jointly with Brian) Purchase Price: $372,500 Property Tax: $8,600 Jamie is selling this house (for $612,000 – net $570,000 tax-free sale) and buying a new house with cash (split with her partner $265,000 each). She will net ~$286,000 to invest within her taxable brokerage account.

New House = $530,000 (50% is $265,000) 3 bed + 1 office / 1.5 bath / 2,200 sqft. Walkable to downtown, near water Property Tax: $6,900 (also split 50/50) Jamie is purchasing this house with her partner.

Debt = -$19,227 (will become $0)

Primary Mortgage = -$19,227 PI Payment: $815.06 + $34.94 additional principal = $850/mo. = $10,200/yr. TI Payment: No Escrow Monthly Payment: $815.06 (she pays $850) Interest Rate: 3.3%

Investments = $1,511,000

Taxable (22%) = $329,000 (3/52/25/20) Pre-Tax (49%) = $745,000 (53/1/45/1) Tax-Free (29%) = $437,000 (99/1/0/0)

Total Allocation: 55% US Equity, 12% Non-US Equity, 28% Fixed Income, 5% Cash

Checking/Savings: $9,000

Taxable Brokerage: $320,000 44/56 53% Foreign Stock, 26% Treasury Bills ($85,000), 18% Cash ($59,000), 3% Tech Stock Dividends are not being auto-reinvested.

Current Traditional 401(k) = $49,000 100% Large Blend

Old Traditional 401(k) = $42,000 100% Large Blend

Old Traditional 403(b) = $17,000 Jamie worked as a teacher for 3 partial years. She is not eligible for the pension.

Traditional IRA = $308,000 100% Large Blend

Inherited Traditional IRA = $329,000 98% Intermediate Bond, 2% Cash ($5,000) Jamie inherited this from Brian. Dividends are not being auto-reinvested.

Current Roth 401(k) = $152,000 100% Large Blend

Old Roth 401(k) = $58,000 100% Large Blend

Roth IRA = $83,000 100% S&P 500 2024 Contribution: $8,000 (maximum)

Inherited Roth IRA = $144,000 99% Large Blend, 1% Cash ($2,000) Dividends are not being auto-reinvested.

W-2 Wages: $61,000 Non-Qualified Dividends: $5,800 Qualified Dividends: $4,200 Net Capital Loss: -$400 Standard Deduction: -$13,850 Taxable Income: $70,000 Energy Tax Credit: $1,200 (maximum) Total Tax: $8,700 Withholding: $11,400 Refund: $2,700

Taxes were self-prepared.

Estate Planning

All documents were drafted, including successor agents, etc.

MTP Meeting Notes

Financial History:

Family History:

Retirement Challenges:

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Housing Decisions:

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Family Legacy: