Young couple getting started

Robert & Sarah MillerJanuary 2013

The couple's primary goal is retiring by age 60, but they are concerned about how to plan to pay off Robert's student debt, fund their children’s education and still focus on their own retirement savings

Facts & Goals

  • Husband and wife, both 35 years old, have two children ages three and five
  • The husband is a urologist and has a substantial level of student debt
  • The wife stays at home with the two children

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Analysis & Recommendations

  • An analysis of Robert’s debt found that the interest rate was fairly low at 3%. Given the relatively low interest rate of the debt, we suggested that their primary focus be on a retirement savings plan and that carrying the student debt for a slightly longer period of time would allow them to reach their retirement goal sooner.
  • We created a retirement savings plan that maximized his contributions to the hospital’s 403(b) plan. The hospital also offered a pension savings plan that we coordinated along with their overall investment portfolio.
  • From a risk management perspective, it was important to Robert that his family be protected should he die prematurely or suffer from a disability that prevented him from performing surgery. We recommended a 25-year term life insurance policy that would pay a death benefit of ten times his annual salary should he die before age 60. We also recommended a life insurance policy for his wife that could assist with the costs of child care should she die prematurely.
    Additionally, we illustrated the need for a long-term disability policy to provide supplemental income should Robert be unable to perform surgery in the case of a disability.
  • After having addressed the retirement savings and risk management elements of the plan, we created 529 savings plans for both of the children. After looking at cost projections for public and private colleges, we created a contribution strategy that would pay for 80% of college costs for each child at an in-state public institution, leaving a portion of the tuition the children would be responsible for paying.
  • The couple had done very little estate planning. We worked with their attorney to update their wills and also drafted durable powers of attorney and health care directives for each spouse.
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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.

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