Our clients, a married couple, were looking to retire at the age of 62 from their full time careers. He worked in professional services and she was a professor. They had differing viewpoints on saving, investing, and whether to spend their savings or leave a legacy for their heirs. They were in need of candid advice and guidance to achieve a comprehensive retirement plan that fit their unique needs.

The Baker Tilly solution
To create their personalized retirement plan, their Baker Tilly advisor recognized that first, their goals needed to be discussed and common areas further developed:

Financial and personal goals for retirement: The first and most important issue was the couple’s goals for their retirement. Each had different goals, so the advisor helped them talk through each individual’s view, then assisted them in prioritizing those goals, as a couple. This key step helped them clarify what they really wanted out of their retirement.

Health care costs: A large component of retirement expenses is health care. The couple wanted to retire at the age of 62, well before Medicare health coverage begins. The advisor shared with them the estimated costs of insurance, the possibility of being uninsurable, and the costs for out-of-pocket health care. This discussion ensured the couple was prepared for health care costs within their overall financial plan.

Risk tolerance: Each person has their own tolerance level for risk in investments. The advisor identified their individual risk tolerances, then combined the couple’s risk tolerances to one model for which both were comfortable.

Asset allocation: The combined risk tolerance, paired with the their prioritized goals and complete financial picture, allowed the advisor to determine an asset allocation strategy to best fit their needs.

Spending habits: The advisor explored the couple’s spending habits to understand what distribution strategy would be needed. To make the transition into retirement easier for the couple, a monthly distribution to their checking account was the best solution since it simulated a paycheck, from which it was easier for the couple to budget.

The results
The Baker Tilly advisor listened to each of the clients individually, and worked with them to determine their priorities as a couple. Their advisor understood that each person’s goals had to be considered in the planning process, yet both had to be comfortable with the final plan. Through this comprehensive planning process, the advisor created a personalized strategy for the couple’s investments that incorporated their retirement goals and needs. Over time, the advisor helped the couple transition into retirement and continued to adjust their retirement plan to accommodate the couple’s needs as they changed over the years.
 

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