Our Capabilities . | . Client Profiles

The True Cost of Retirement
A couple in their early 60s have decided to retire. The wife is eligible for a pension from her career as a teacher and the husband has a company retirement plan with over $2M saved. The clients refinanced their home nearly a decade prior to help their daughter with graduate school, and are now concerned that they cannot afford to retire since they still have a mortgage. The clients‘ primary goals were: to determine a retirement distribution plan that would maintain their current lifestyle for forty years, to protect their assets against the cost of a prolonged illness, and to update their investment plan to account for their reduced risk tolerance and need for current income.

Their advisor worked with the couple to define their annual spending need in retirement, and then illustrated the impact of inflation and future costs of healthcare on their budget. After analyzing their current home mortgage, the advisor recommended refinancing the mortgage to take advantage of current lower rates, which ultimately saved the clients about 25% per year in interest expenses and reduced their cash flow need in retirement. After calculating the clients’ pension and social security benefits, the advisor proposed an asset withdrawal strategy to meet the rest of their income needs, prioritizing withdrawals based on the tax-efficiency of their accounts. Balancing the need to minimize portfolio risk but still grow assets to combat inflation, the advisor proposed a revised asset allocation and investment program tailored to the couple’s income and life expectancy needs. Finally, after analyzing the statistical likelihood of a prolonged hospital stay and illustrating it’s negative impact on the couple’s retirement savings, the advisor worked with a licensed insurance broker to procure a long term care policy that insured the clients’ nest egg.

This client profile should be viewed as hypothetical even though some details may be specific to strategies developed for actual clients. They are for illustrative purposes only intended to demonstrate the capabilities of Hines Warner. They are not intended to serve as investment advice since the availability and effectiveness of any strategy are dependent upon your individual facts and circumstances. Results will vary, and no suggestion is made about how any specific solution or strategy performed in reality. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for final recommendations and before changing or implementing any financial, tax, or estate planning strategy. Future performance can never be guaranteed.