Michael & Ilene JacobsApril 2013
Mr. and Mrs. Jacobs are recent retirees who have never worked with a financial planner before. They are interested in buying a second home in a resort area, but would like help in understanding how this might impact their other goals
Facts & Goals
Mr. Jacobs’ brother, a broker, had helped with some of the Jacobs' investments, but an analysis of all the Jacobs' assets found that two-thirds of their portfolio was spread across several different institutions and invested in an inconsistent manner
The Jacobs were also grandparents and were interested in creating a college savings plan for their four grandchildren
Analysis & Recommendations
- After working through a planning process and establishing a comprehensive report of the couple’s liquid assets, our analysis indicated the Jacobs had a surplus available to purchase the resort home.
- The Jacobs had not yet claimed Social Security benefits, and an analysis suggested they could maximize their benefits by utilizing a “File and Suspend” strategy. This allowed Mrs. Jacobs to begin receiving spousal benefits while Mr. Jacobs continued to let his benefits accumulate credits until age 70 when he could maximize his benefits.
- After discussing the goals and objectives of their estate and investment planning, the Jacobs consolidated the assets into a diversified portfolio designed to reduce risk and provide adequate income during retirement. An income analysis was performed, taking into account their bond portfolios and Social Security income projections. A fixed income strategy was incorporated into their investment portfolio in order to create an additional income stream that they could not outlive.
- During the planning process, we learned their wealth transfer plan was many years out of date. Their wills and beneficiary designations needed to be updated to ensure their assets would pass to their intended beneficiaries, etc. We worked with their existing attorney to update their estate planning documents and retitle assets to meet the objectives of their wealth transfer plan.
- We also showed them the benefits of 529 college savings plans and established one for each grandchild. This not only provided funds for their education, but also enabled them favorable tax options.
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The scenarios presented here are for informational purposes only and do not represent the experience of actual clients. Individual results will vary and the outcomes described are not indicative of future performance or success.
While all client situations are unique, these case studies are intended to provide examples of how FirstPoint Financial advisors work with clients to find creative and effective solutions to each client's unique financial planning situations.