Client Case Studies

Contemplating Retirement – Richard and Diane, seeking the confidence to retire

Richard and Diane, who requested an appointment with Rockwood after reading one of our personal finance columns in the local newspaper, built their nest egg with a diligent approach to saving. Despite their relative affluence, they were having hard time contextualizing their wealth and were uncertain if it was “enough” to maintain their dignity and independence throughout their lifetimes.

To compound their worry, the portfolio they had was a self-managed and seemingly random collection of retail mutual funds held at nine different custodians, some of which they maintained in a separate IRA with a broker referred to them by their neighbor. There existed no coherent strategy for their investable assets and the result was a portfolio highly concentrated in U.S. large-company stock mutual funds and long-term corporate bonds. Richard and Diane were admittedly unaware that nine different large U.S. stock funds did not constitute diversification, and that they were taking on more risks and higher expenses than were warranted to accomplish their objectives.

After sitting down with Richard and Diane and listening to their concerns and income needs in retirement, we demonstrated how to improve the expected portfolio outcomes during a period of extended withdrawals (i.e. their retirement). We showed them how a properly engineered portfolio can provide retirement cash flows more cost effectively and with less volatility than they had experienced in the past.

Additionally, during the planning process we were able to advise them on Lump Sum vs. Monthly Pension distribution options, optimal Social Security Income claiming strategies, reducing their lifetime expected tax liability with strategic Roth IRA conversions, surrendering an expensive and unnecessary Variable Life Insurance policy, navigating the complexities of their Employer Retiree Health Insurance coverage, and facilitating the purchase of an RV to travel around the United States.