If you’ve already embarked on retirement and need a guide,
we can help light the way.
Case Study: Elizabeth
“I’m retired. Am I going to be okay?”
Initial Situation
- Age: Elizabeth, 74
- Feeling: Curious
- Goals:
- Live comfortably in retirement
- Income: $89,000 in retirement income
- Investments: ~$420,000
- Other considerations: Income, income, income
Elizabeth was referred to us by a former work colleague, who was not a Cypress client but had attended a Cypress seminar. When we first met Elizabeth, she had already been retired for 4 years. Her husband had unfortunately passed away a decade earlier, and while she had been able to manage her finances well and transition comfortably into retirement, she was still afraid she might be missing something.
Elizabeth mostly wanted what she called a “sanity check”—she just wanted to talk to a professional and make sure that she was doing the right things, and that she was “going to be okay”. She was starting to have some minor health issues, and she wanted to make sure that she didn’t become a burden on her adult children. She felt like she had plenty of income to cover her basic needs, but she was concerned about inflation, and she wanted to make sure that her investments were keeping pace.
Situation Now
- Status: Elizabeth is comfortably retired
- Feeling: Confident, healthy, and busy with grandchildren
- New questions:
- Can I start giving annual gifts to my two children and grandchildren?
- How much can I give away without risking retirement?
Today, Jeff meets with Elizabeth every six months. Elizabeth also referred one of her daughters to become a Cypress client, which now gives her peace of mind that her wealth will be managed appropriately even after her eventual passing.
As of now, Elizabeth’s basic needs are covered entirely by her Social Security income and her employer pension. However, at her age, she is also required to take Required Minimum Distributions (RMDs) from her IRA, which adds another $20,000 of annual income. We’ve talked to her about using a portion of that retirement money to gift to her children and grandchildren, and she’s been able to do so, treating the whole family to an annual beach vacation.
Elizabeth is on a good path. She emails back and forth with Jeff a couple of times a month, commenting briefly and asking Jeff’s thoughts on stock market and economic headlines. She’s taken an increased interest in her investments during retirement, and she enjoys learning about the ins and outs of the economy.
How we helped Elizabeth
Our Wayfinder process worked just as well with Elizabeth in retirement as it does with working families. By understanding her financial strengths and weaknesses, we were able to consult with her about an appropriate Social Security claiming strategy, taking into account her life expectancy and her other potential income streams.
Once we had settled on a solid long-term plan, we actually recommended that Elizabeth increase the amount of investment risk that she was taking in her portfolio. She had always been very conservative (especially since her husband had passed away), but we were able to show her that her portfolio was gradually losing purchasing power as inflation compounded. With a solid base of income from her pension and Social Security, she could afford to take some more risk in order to help keep pace. She also liked the idea of “investing for her kids and grandkids”, and she planned to leave them a considerable inheritance. Now she’s recognizing that she can actually start gifting to them while she’s still alive, so that she can better enjoy the time she has left with them.
The client stories are based upon the specific client circumstances, each of which had a particular set of goals and objectives. The services described in these stories may differ from services provided to other clients, and the results achieved may not be similar, as every client’s goals and objectives are unique.
