Case Study 2: Amy

Retirement Planning Case Study 2: Amy

Age: 48
Profession: Sales Executive

Primary Goal

To finally plan for retirement and get help with company stock.

Amy has worked hard and saved her whole life but wondered if she was doing enough. Retirement seemed far away. And how did all of her employer stock awards fit in? In this retirement planning case study, we examine how Amy tackled these questions.

The Issues

While retirement still seemed so far away, Amy knew that it was time to start planning for it. She’d done everything that she was “supposed” to do, even maxing out her 401(k) plan every year.

In addition, she had accumulated stock in her company over time from restricted stock awards, stock options and her company’s stock purchase plan. A large part of her wealth was tied up in her company. Would it be enough?

Here were the issues:

  • Was she saving enough to actually retire one day? Amy knew that there was still time between now and retirement, but when would that be? She didn’t want to get to age 65, only to find out that she had to work for ten more years.
  • How did her employer stock fit in? Her company’s stock seemed to have done well over the years, but the majority of Amy’s wealth was tied to her employer. Should she sell or buy more?
  • What else was she missing? Up until this point, Amy had done it all herself. Was there something that she was missing?

The Plan

Amy realized that acting now would make things far easier down the road. She wanted help from someone with extensive experience with stock plans and retirement.

For Amy, the financial planning process looked like this:

  • Gather the data. This included the details of all her investment accounts, her tax returns and her current lifestyle expenditures.
  • Take a reality check. The next step was look at her current trajectory and determine whether or not she was really on track to retire. Would she need to make any course corrections?
  • Create a vision. After discovering that she was on track, the next step was to think about what she wanted. Could she retire earlier? What would she need to do in order to accomplish that?
  • Establish new accounts and execute the plan. Finally, Amy needed to take action and make the adjustments needed in order to retire when she wanted.

Understanding her options, Amy was able to make a confident, informed decision about making a plan for retirement. She knew that a few small actions today would pay off down the road.

The Results

While Amy made a few small changes to her savings, she hasn’t compromised on traveling to new places all over the world every chance she has. She doesn’t feel guilty buying the things and experiences she wants, knowing she is already on track to retire early.

In addition to retirement planning, she put together a plan to start diversifying out of her company’s stock while minimizing taxes. She still participates in her company’s stock plans, but it doesn’t make up the bulk of her net worth.

Finally, Amy addressed one area that she’d neglected over the years: her estate planning. Having seen her aunt pass away without a will or advanced directive for healthcare, she knew how important this planning could be.

The financial planning process helped Amy in many ways:

  • She sleeps well at night, knowing that she’s on track for an early retirement.
  • She created a plan to reduce her company stock to a reasonable level – all while minimizing the tax impact of selling.
  • After years of putting it off, she finally had estate planning documents drawn by a local attorney.

Today, Amy is still on track for early retirement. She continues to travel the world and visit new places with friends.

Amy can sleep well at night knowing that she has a sustainable retirement plan in place. She can relax, travel and enjoy being in the moment.

She regularly reviews her plan to see if she needs to make minor course-corrections.

For privacy reasons, the retirement planning case study described above is hypothetical and the facts do not apply to an actual Prana Wealth client. This case study should in no way be construed as a guarantee that a current or prospective client will experience similar results or levels of satisfaction if he or she engages with Prana Wealth for wealth management services.

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