Bill, M.D., 65 & Julie, R.N., 62
Bill, a surgeon, and his wife Julie, a registered nurse, have done well by achieving a high six-figure salary and committing to building wealth over the last 35 years. The couple has enjoyed a long, stable marriage, paid for their children’s college, and maintained only good, low-interest debt on their home. This allowed them to build a $10 million liquid portfolio and a net worth in excess of $13 million.
Having worked with a number of investment advisors, insurance agents, attorneys, and accountants to help them plan for their retirement, they have concerns about transitioning into retirement. As they explore this new phase of life, they want to be confident that the advisors they’ve worked with have given them coordinated advice and ensured they are not missing something. The couple also wants to make sure they are taking advantage of all planning opportunities to leave a legacy to their children, grandchildren, and charity.
Goals:
- Ensure sufficient income and assets to live through retirement while maintaining their current lifestyle.
- Minimize current taxes on their portfolios.
- Transition out of current practice through practice arrangement. Minimize capital gains tax on transition.
- Meet their set retirement date within six months.
- Leave a legacy for their children, grandchildren, and charity.
- Be hands-off on their finances and allow a primary advisor to drive.
How Rx Wealth Advisors Helped:
- We improved the tax efficiency of their large portfolio while reducing their overall portfolio risk and improving expected long-term returns.
- We began utilizing a tax wrapper investment structure to defer portfolio gains until Bill and Julie need the funds.
- We worked with an attorney to update their estate planning documents, inserting trusts into the documents to protect their children’s and grandchildren’s inheritance from future creditors, in-laws, and ex-spouses.
- We reworked their estate plan so their children and grandchildren will pay significantly less in income and estate taxes.
- We repositioned underperforming, high-cost whole life policies into policies on Bill and Julie that provide a much greater death benefit to children and long-term care coverage during Bill and Julie’s lifetime.
- We terminated a whole life policy on Bill, and he was able to avoid paying tax on the build-up in gain.
- We helped to develop a tax-efficient charitable giving strategy that allows them tax benefits during their life while building up a significant charitable legacy at death.
- We worked with them and their children to define their charitable legacy.
- Bill and Julie’s parents were still living and we worked with them to achieve significant additional income tax benefits upon their parents’ deaths.
- We negotiated Bill’s buy-out from his practice, giving him a large influx of cash. We implemented a tax-loss harvesting program to minimize the capital gains on the practice sale.
- As part of the buyout, he maintains a multi-year consulting salary to be able to continue to participate in the retirement plans.
- We began utilizing 529 accounts to fund their young grandchildren’s future educational costs.
- We built them a net worth statement and supporting schedules, so they are organized.
- We implemented our Rx Wealth Financial Wealth Management Framework to ensure they are systematically identifying opportunities and minimizing risks within their personal lives and their wealth.
Results:
Bill and Julie have clarity and peace of mind that they are in a much better place with their finances.
They are confident that all professionals advising them are coordinated and working toward common goals with Rx Wealth serving as their team lead.
With Rx Wealth handling the details and execution of their finances, they were able to significantly lower the cost of their investment portfolio and put more after-tax money in their pockets.
The couple now has more time to focus on their future retirement plans and can enjoy retirement with their children and grandchildren.