By Bryan Lee, CFP®, MBA
At Strategic Financial Planning, our goal is to help you discover, design, and live the life you want by aligning your finances with your vision and values. We utilize a life planning approach, often providing advice and guidance across multiple areas such as retirement, estate, tax, business, cash flow, investment, college and insurance planning and analysis.
While every client’s situation is unique, we want to share how we have helped one couple organize their finances and plan for early retirement. The following case study provides insight into our process and the types of analysis we provide. We hope Sally and Shane’s (1) story will show you how our proactive process, services, and strategies can make a difference in your life too.
Sally and Shane have been clients since 2015. They were married with two young children when they first came to work with us. As professionals in their early 40s, they both operate separate businesses with a few employees each.
These clients had been doing many things well when they first signed up for our financial planning services. They had already been investing regularly in a reasonably well-diversified investment portfolio, growing their wealth by keeping their expenses in check and investing the rest, and they had begun protecting their wealth by completing estate planning documents and setting up a family limited partnership (FLP).
They realized, however, that they were spending a significant amount of time trying to keep up with their increasingly complex financial lives. This affected the amount of time they were able to devote to their children and their growing businesses. They also didn’t particularly enjoy managing all the minutiae of their finances, nor did they have anyone to turn to who could provide trusted advice based on a complete view of their family situation.
Sally and Shane came to us for help simplifying their financial lives. They wanted someone who could take the reins on the day-to-day management of their finances so that they could get back to what mattered most to them. They also had questions about how they could make their early retirement dreams a reality.
We thoroughly analyzed all of Sally and Shane’s financials, reviewing their current portfolio, their tax history, debt, risk, and retirement goals. As we gathered the information, we focused on 6 key areas:
While both Sally and Shane enjoy their work and are highly successful business owners, their ultimate goal was to be able to retire early to enjoy traveling and spending time with their family.
To meet this goal, we analyzed their spending and came up with targeted amounts to save each year during their working lives, which could then be invested. As their finances have improved over the years, we recently helped them navigate the development of a comprehensive real estate plan to provide long-term property ownership in the areas where they were interested in traveling. First, we discussed purchasing a vacation townhouse in a city where they attended college so they could visit for football games. Next, they will purchase property in Europe to serve as a home base for future international travel.
We helped each spouse navigate employer-sponsored retirement plan options (SEP, SIMPLE, 401(k), etc.) for their respective businesses. We weighed their desire for tax-advantaged growth against the costs of administering the plan and contribution requirements. This helped the couple make the best decision for both their businesses and their employees.
We also helped Sally and Shane make decisions on several other business considerations, including:
- Selecting health insurance
- Optimizing their HSA investments
- Evaluating purchase offers received for their businesses
- Choosing a cybersecurity insurance policy
- Refinancing the office condo
- Purchasing additional office space for future expansion or rental income
We also analyzed Sally and Shane’s investment portfolio. They came to us with several investments that we wouldn’t have recommended, including a variable annuity for each spouse, as well as disproportionately large holdings in some individual municipal bonds that didn’t seem to fit with their aggressive risk tolerance. Additionally, they were sitting on a large amount of cash that they were unsure how to best invest.
We put together a new portfolio and a transition plan, keeping in mind the tax implications of selling the existing investments. Because Sally and Shane continue to contribute to their portfolio consistently, we are able to manage the portfolio in a way that keeps the investment allocation in line with their risk profile while also taking advantage of tax-loss harvesting opportunities.
Due to several rental properties and private placement investments, Sally and Shane’s tax situation was somewhat complex. We review their tax return each year and work closely with their CPA to help ensure nothing was missed. We also proactively looked for opportunities for tax savings by running detailed, multi-year tax projections and evaluating scenarios.
When they decided to purchase and later sell an office condo adjacent to one of their businesses, we helped them navigate financing options and the tax consequences associated with selling.
Education funding was a big consideration for this couple. They wanted to send their children to public school for K-12, but planned on providing 7-8 years of financial support for each child to attend a private college to potentially include a master’s degree.
We helped them select 529 investments with low costs and came up with a funding target, balancing the tax advantages of these plans with the flexibility of the taxable investments held within the family limited partnership.
After all that we helped this couple achieve, they introduced us to both of their parents so we could help the whole family plan for the future. We are currently coordinating a family estate plan so there are no surprises down the line, ensuring that any eventual transition will be a lot smoother and less stressful.
How We Can Help You
We at Strategic Financial Planning are here to help you achieve a successful retirement and confident financial future. If you’re experiencing a situation similar to Sally and Shane’s, or if you face an entirely different need, we would love to hear from you. Call (972) 403-1234 or contact us online to set up a complimentary get-acquainted meeting so we can see if we are a good fit!
Bryan Lee is the founder and president of Strategic Financial Planning, Inc., an independent, fee-only financial advisory firm. With more than 27 years of industry experience, Bryan uses a unique client-first financial life planning approach and process to help his clients get the most out of life. Bryan earned his Bachelor of Business Administration in finance and his MBA in international finance from the University of North Texas. He is also a CERTIFIED FINANCIAL PLANNER™ professional.
Bryan is actively involved in his community and industry and has served on the boards of several associations and charities, including the Dallas/Fort Worth chapter of the Financial Planning Association, the National Association of Personal Financial Advisors, Family Services of Plano, the CITY House, and the Journal of Financial Planning. Bryan has been featured in local and national media, including The Wall Street Journal, Investors Business Daily, CNNfn, USA Today, SmartMoney, Kiplinger’s Personal Finance, Financial Planning Magazine, The Dallas Morning News, and Dow Jones Newswires. And, he has been recognized as a Five Star Wealth Manager and one of Dallas’s Best Financial Planners in D Magazine every year since its inception and recently as a Top Wealth Manager. To learn more about Bryan, connect with him on LinkedIn.
(1) Names have been changed to protect confidentiality.