Golden again

Peter and Rose went from worrying they would outlive their savings to feeling secure about the future — and enjoying a better lifestyle. By implementing our recommendations, they increased their annual cash flow by more than $300,000 and created an enduring family legacy.

Situation

Peter, a 79-year-old retired CEO, and his wife Rose, 69, saw the value of their investment portfolio decline dramatically in the early 2000s, resulting in a significant reduction in their cash flow. They were forced into survival mode — they ceased all travel, deferred home maintenance and stopped supporting the charities they had established. Peter, in particular, was concerned that Rose might not be financially secure for the rest of her life, and they both worried they wouldn’t have anything to leave their four children and 15 grandchildren.

Recommendations

  • Restructure the investment portfolio to increase income and maximize tax efficiency
  • Reorganize mortgage debt to decrease monthly payments
  • Properly record charitable contributions for tax purposes
  • Review life, health and property-casualty insurance policies

Results

Restructuring the investment portfolio and reorganizing the debt generated more than $280,000 in additional annual cash flow for Peter and Rose. They also reduced their tax payments by over $20,000 annually by claiming charitable deductions and saved $18,000 per year in insurance premiums — while obtaining better coverage. With the additional cash flow, Peter and Rose were able to return to their former lifestyle. Peter passed away at age 90 without ever having to return to survival mode, and more than $1 million was transferred to his children upon his death. Rose maintains her lifestyle and will be able to pass on an additional legacy to her heirs.

Disclosure

This case study has been designed to provide an example of the comprehensive wealth planning services provided by Traust Sollus Wealth Management, LLC (“Traust Sollus”). This case study should not be viewed as any indication that these clients approve or disapprove of Traust Sollus or the services it provided. Client names have been changed to protect each client’s identity.

This information is being provided for illustrative purposes only and should not be construed as the rendering of personalized investment advice or as the depiction of the historical investment and wealth planning performance of Traust Sollus. All information contained herein, including but not limited to, monetary figures, performance figures, net worth figures, asset values, account values, returns, statements of income, tax rates, insurance policies and information, estate plan examples, and general family circumstances, are for illustrative purposes only. Although we believe that the information presents an accurate depiction of the experience of certain of our clients, there is no guarantee that this information will represent any other client’s actual experience, which may be materially different than presented herein. Any difference in a client’s financial conditions, objectives or investment strategies could materially alter the results portrayed. Because each client has different financial circumstances and corresponding financial planning objectives, each client’s account will be managed in a fashion unique to and appropriate for that client.

It should not be assumed that recommendations made by Traust Sollus in the future will be profitable or will equal the performance figures or results discussed herein. Past performance is not necessarily indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment, investment strategy, wealth plan or wealth planning technique, or product made reference to directly or indirectly in this document, will be profitable or equal to corresponding indicated performance levels. Performance results indicated herein do not reflect the deduction of transaction and/or custodial charges or the deduction of investment management fees, the incurrence of which would have the effect of decreasing historical performance results. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio. Traust Sollus does not use performance-based data to determine which case studies to include on its website. Additional information is available upon request.