Broker Check
Investment Management & Retirement and Wealth Planning
 

Highly Compensated Executive – Planning for HINRY’s – Marc & Marisa Andersen

Their Goals and Desires

Marc & Marisa Andersen both have highly successful careers. They each work in technology, and both have had a number of high profile and high paying jobs with a series of different companies. They like their current jobs, but are always interested in a new opportunity and it is probable that they may get recruited to another company in the future. Marc & Marisa are in their mid 40’s, are both very good in their fields, sought after and highly employable, and have no intermediate term goals to stop working. However, they would very much like to build financial security and have their own sources of passive income so that they do not feel that they need to work if they choose to do something else.

Their Financial Lives

Marc and Marisa had been high income earners for a long time, but their careers are intense and all absorbing, and as a result they had not devoted a lot of time or energy on their own financial plan. They had a large, lovely home, with a large mortgage accompanying it, beautiful cars, and two school age children with which they enjoyed a full and very nice lifestyle.

They each had multiple retirement plans from the several companies they had previously worked for, and they were both participating in their current companies’ 401(k) plans. They had stock grants, stock options, and shares in an ESPP plan, as well as some individual stocks and mutual funds. They often found themselves with a high cash balance in their checking account, and had a significant amount of uninvested cash that they were unsure of what to do with. They had goals for each of their children to go to college, but had not set aside any funds for that purpose. None of the companies they had worked for had a defined benefit pension plan, and they had no planned source of retirement pension other than Social Security, which seemed like a dim prospect.

They had not done any retirement or financial planning up to this point although keenly interested in it, and both felt an urgency to create some meaningful and significant financial security with the large amounts of income they were being paid.

Marc and Marisa were a HINRY family – High Income but Not Rich Yet. 

Their Questions and Concerns

They scheduled an appointment with the Gevers Wealth Management team at which they wanted advice and help with the following questions:

Are we on the right path for us to be able to retire in the future?

We don’t have pensions, how do we create future passive income?

We expect future windfalls from company stock (or other sources) – how do we coordinate and project that into our retirement planning?

How much income can we expect to generate from our investments in the future?

We have too much cash – what should we be doing with it?

What changes or steps should we be considering now?

How do we create a strategic overall plan for our investments and contributions? And how do we keep track and report on our various accounts?

Should we use a Roth IRA for part of our planning?

Should we consolidate our various accounts?

What about our mortgage – what is the best strategy for us to consider?

How, and how much, should we fund for our children’s college costs?

What should we be concerned about regarding the economy, the US National Debt, and Money Printing?

Are there any other issues we should be considering or steps we should take to further enhance our financial security?

The Outcome

The Gevers Wealth Management Team took Marc and Marisa through a retirement planning process specifically for high income executives based on many years’ experience working with HINRY families and individuals. Over the course of several meetings they offered objective advice for their questions, and endeavored to provide a balanced perspective with both benefits and disadvantages of the many decisions they were facing. The team also provided written notes with a summary of each meeting, along with an overall plan.

At the conclusion of the retirement planning meetings, Marc & Marisa had achieved the following; 

  1. They had a sense of confidence for and historical probability of their financial success for a future retirement.
  2. They created a long term strategy to fund multiple buckets built to create multiple streams of passive income for their future.
  3. They had a comprehensive future passive income plan which detailed how much income they planned to draw, and where they planned to draw it from, coordinated with a withdrawal strategy to attempt to maximize income and minimize income taxes.
  4. They walked through a personal analysis of their mortgage, and used this output and their discussions to create a strategy to best deal with their debt.
  5. They integrated their projections/expectations of future capital from company stock benefit plans (options, RSU, ESPPP, etc.) into their retirement income funding plan.
  6. They came up with a consolidation plan for the various deferred retirement accounts from the companies they had worked for in the past.
  7. They discussed and had a much better understanding of investment principles for a pre-retirement accumulation portfolio, and how they might best allocate their contributions and investments.
  8. They had an age-based schedule which outlined upcoming time-sensitive financial decisions and issues they would need to deal with in the years to come.
  9. They had a cash plan in place addressing their liquidity needs, short term major spending, and need for a cash balance – and scheduled contributions to investments and debt reduction from their excess cash flow.
  10. They reviewed expected college costs for their two children and came up with a long term funding plan to try and meet those costs.
  11. They had a comprehensive asset allocation and diversification plan for their overall investment portfolio, which they planned to implement and have managed by the Gevers Wealth Management Team.

Implementing their Plan

Once Marc & Marisa had a HINRY retirement and investment plan completed that they were comfortable with, they took a number of steps to reach their goals.

The Andersen’s set up some new monthly contributions into investment accounts meant as sources of future passive income. A rollover and consolidation plan for their retirement accounts was implemented, new accounts were set up, and the team assisted with the steps necessary to move their old retirement accounts into a new and consolidated retirement portfolio. A college saving portfolio was set up and a regular contribution was scheduled to be added monthly. An account set up and review meeting was held right after the new portfolio was established to go over their statements and to review the rollover and transfer process and their new investments, and answer any of Marc and Marisa’s questions. (Click here to read more about our Investment Management Services)

Marc and Marisa agreed to meet once per year to review their progress. Once their overall portfolio exceeded a threshold amount, they were then scheduled on a pro-active meeting schedule to get together twice per year to review progress, discuss the portfolio, the economy and the markets, and help with any planning needs that they might need to discuss. They also were set up on an age based calendar that identified many of the time-sensitive financial decisions that they may need to take care of in the future. Marc and Marisa were also set up with comprehensive web access to their account, along with regular statements, and an aggregated portfolio and asset allocation view of their entire financial situation. The Gevers Wealth Management team also connected with their CPA and attorney to help coordinate and facilitate any financial information or assistance that their other professionals might need. (Click here to read more about our Wealth Management Services)    

Marc and Marisa Andersen now felt that they were putting their excess income to work for their future benefit, had a long-term retirement and investment plan and more confidence for their future, and they also felt good that they had a long-term partner to help them along the way with advice, guidance, and to manage their retirement assets.

This example is a case study for illustrative purposes and are not actual clients. The principles and strategies and advice are based on our years of experience working with families with similar circumstances. To request a consultation please contact us at info@geverswealth.com.