Medical Professional – A Case Study
In this Medical Professionals client scenario, Braun-Bostich & Associates (BBA) helped Peter and Wendy plan around their ‘later career stage’ goals as they contemplate their segue to retirement. Although their wealth advisory relationships over the years have been sufficient enough to get them to where they are, they weren’t confident that the current relationship was a good fit as they move to retire – that’s where BBA stepped in…
Peter and Wendy Morgan* have reached a point in their medical careers where retirement is top-of-mind almost daily. That mindset is typically aligned with a sense of insecurity around, perhaps, not knowing whether or not they’re financially prepared for the move. It’s an ordinary evolution, and one that BBA has addressed with many clients throughout its professional history. The Morgan’s have worked hard to position themselves for an enjoyable retirement. Inherently, BBA is eager to help ensure that any stress, worry, or uncertainty about retiring quickly becomes postscript, through a carefully crafted financial plan in support of their revised goals and timeline to retire.
As you’ll see below, executing on BBA’s recommendations and relying on their ongoing guidance, the Morgan’s now have more time to focus on their impending retirement plans and intend on enjoying those years with their children and grandchildren. Here’s how the relationship started…
Note: This BBA strategy is used for a variety of medical professional clients in many different personal and financial situations, including people like Peter and Wendy. BBA’s role here is to help solidify what their retirement goals are and to establish a practical pathway for them to achieve those goals.
*Names have been changed for privacy.
Personal and Financial Snapshot
Peter, a plastic surgeon, and his spouse Wendy, an Internist, have done financially well over their shared 40 years together through a disciplined approach to wealth accumulation and planning. Each now enjoying a healthy six figure income that has fueled steady growth in their net worth for the last decade.
The couple has enjoyed a long, fulfilling marriage, financed their children’s education, and maintained only good, low-interest debt on their home and other assets. This has allowed them to build an $8 million liquid portfolio and a net worth in excess of $11 million.
Case Introduction & Retirement Goals
Over the years, the Morgan’s have worked 1:1 with several financial advisors, insurance specialists, estate attorneys, CPAs and others to assist them in planning for their retirement years. Now that they’re getting closer to those years, they have concerns about the transition with having to managing each advisory relationship standalone – they want their financial advisor to take control as the advisory hub delivering comprehensive, coordinated advice. A single go-to resource as they explore this new phase of life that financially monitors the entire journey ensuring that all moving parts work in harmony to the couple's benefit. Of particular interest is making sure that they are taking full advantage of all Advanced Planning opportunities in order to leave a lasting legacy to their children, grandchildren, and importantly, to charities they care about.
Their focused goals going forward include:
- Being at arms-length with management of finances allowing their primary ‘financial’ advisor to honcho all complimentary advisor relationships as single point of contact for them.
- Set and meet their retirement date within six months.
- Making certain they’ll have sufficient assets and income throughout retirement while minimally maintaining their current lifestyle.
- Implementing tax mitigation strategies within their investment portfolios.
- Structuring a practice sale/work-back arrangement to transition out of current practice while minimizing capital gains tax.
- Leave behind a legacy for their children, grandchildren, and charity as noted.
BBA Recommendations & How We Helped
Peter and Wendy worked diligently with their BBA advisor through all phases of BBA’s comprehensive Wealth Management Process and Formula to hit on many of the components of Advanced Planning services offered by BBA – areas of focus that included tax planning, risk management & insurance planning, estate planning and charitable giving. Here’s where we landed…
- Enhanced the tax efficiency of their substantial portfolio while decreasing their overall risk resulting in improved long-term return expectations.
- Structured a tax-wrapper account to defer portfolio gains until the couple needs the funds offering some protection from tax, as long as the funds stay within wrappers.
- As lead advisor, BBA worked with an estate attorney to revise Peter and Wendy’s estate planning documents, incorporating trusts that would protect their children’s and grandchildren’s inheritance from future creditors, ex-spouses, etc.
- Further altered their estate plan so that income and estate taxes would be substantially less for their children and grandchildren.
- Repositioning of underachieving, high-cost whole life policies into policies on Peter and Wendy that provide a greater death benefit to children along with LTC coverage during the couples lifetime.
- Assisted in developing a tax-efficient charitable giving strategy helping to maximize their income tax benefits going forward while building up a significant charitable legacy at death.
- Strategized jointly on charitable legacy with the couple and their children.
- Because Peter and Wendy’s parents were still living at point of planning, we consulted with them to attain substantially more income tax benefits upon their parents’ deaths.
- We generated a large influx of cash for Peter through negotiation assistance on his practice buy-out along with applying a tax-loss harvesting plan to minimize capital gains on the sale of the practice.
- As part of the buyout, Peter retains a multi-year consulting income enabling him to continue to take part in the retirement plans.
- Employed 529 accounts to fund their grandchildren’s future educational cost needs.
- Constructed a net worth statement with supporting schedules for the couple for organizational purposes.
- BBA systematically initiated its Wealth Management Process & Formula to ensure Peter and Wendy are thoroughly identifying opportunities while minimizing risks within their lives and their wealth.
- Peter and Wendy now have clarity and peace of mind that they are in a much better place with their finances and path to retirement.
- They are confident that all professionals advising them are coordinated and working toward common goals with BBA serving as advisory lead.
- With BBA 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.
If Peter and Wendy's situation sounds similar to your own, we would love to explore your situation and discuss how BBA could help alleviate your issues and pain points, and ultimately help you build confidence in your financial future. Please do not hesitate to reach out and schedule a free consultation with one of our advisors. We look forward to hearing from you soon!