Olivia and William
CASE STUDY # 1
70 and 73
Create a plan for when they need more help managing their finances, reduce taxes, optimize giving to their kids.
CASE STUDY # 1
70 and 73
Olivia and William are early in their retirement and hoping to make the most of the coming decades. They have always managed their finances and have enjoyed doing it, but are wanting more freedom to travel and peace of mind that if something happens to either one of them, the other will be okay.
They have reached a point where they want to enjoy life more and not worry about their finances. They have some health concerns, but also recognize their taxes, estate plan, and how they gift to their kids could use a review and more planning at this stage of life.
Olivia and William both feel good, but they admit their memory is not what it used to be. They are concerned that in the coming years, they may not make the best decisions with their finances, which could change the course of their retirement.
William does his own taxes each year, but Olivia has never been involved and has no interest in learning. Olivia has been paying the bills like clockwork for more than 30 years together, but William has no idea what bills they have or any clue how to use Olivia’s system for paying bills. William manages the investments and gets them cash when they need it, but Olivia knows they have multiple accounts in different locations and is not sure how to access them.
They are unsure how best to bring each other up to speed on what the other has been doing and although William has been doing the taxes, he thinks there is more tax planning they could be doing. He admits, “I don’t know what I don’t know.”
They are particularly interested in creating continuity if one of them passes away or is diagnosed with a major health issue, reducing taxes, and creating a strategy to gift to their kids in a mindful and tax-efficient way.
The first step is to take a step back and not focus on the finances. Olivia and William need to focus on envisioning an ideal life for them going forward. They should dream about the question, “What is in a great life? Describe what you see, what you are doing, and who is around you.”
After a thorough discussion and creating a vision of their ideal life, the next step is to understand how Olivia and William managed their finances in their separate roles to draw a clear picture of how it could work together.
The past few years of tax returns and current estate plan should be reviewed to identify missed opportunities and mistakes that do not align with their current wishes.
Olivia and William should work towards understanding their current system, create a system where either one could take on the roles they want, automate roles they didn’t, and hire experts in areas where needed.
Their tax returns should be analyzed to see if there have been any missed opportunities to pay less tax.
The end result should be:
The financial planning process should help Olivia and William have a plan and system in place if their memory worsens. This plan should also help them take advantage of strategies to reduce their taxes and decide how to start giving to their kids while they can enjoy it most.
Note: The above case study is hypothetical and does not involve an actual Kindness Financial Planning client. No portion of the content should be construed by a client or prospective client as a guarantee that they will experience the same or certain level of results or satisfaction if Kindness Financial Planning is engaged to provide investment and financial planning services.
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