The Clients: The clients were former business owners who had sold a very profitable small business and retired in their mid-50s. They had planned to put the majority of their money into fixed-income investments such as bonds and term deposits to help them generate a stable income for the future. Unfortunately, the market didn’t cooperate.
The Challenge: the clients had already retired thinking they could simply invest in bonds or CDs and be safe, but consulted Prime Wealth when they realized they had no control over the direction of interest rates.
Result: Prime Wealth Advisors’ multi-disciplinary team helped them find tax-saving strategies and put part of their assets in structured products so they could have a dependable income no matter what direction interest rates or the markets went.
The Backstory
The investors had experienced losses in 2008, which had lessened the assets they had available to them. Then, over the years following 2008, both bonds and term deposits were paying extremely low rates, leading to almost no gains. The couple was unsure what to do. They were at an important time in their retirement, and they were in danger of backsliding.
They had consulted with two financial advisors recommended by friends, but most of the advice they received seemed to focus primarily on investing. Since they were relatively young but already retired, they didn’t want to make any more mistakes, so they needed to find a sound solution that worked. They called Prime Wealth because they liked the idea of retirement planning alongside tax and estate planning.
Prime Wealth advisors worked with the couple first to analyze all their assets and discover how much they needed to pay for their desired lifestyle. Advisors met with them several times to gather more information and help clarify their goals. From there, Prime Wealth’s financial advisor, accountant, and estate planning attorney met to discuss their situation, and came up with a proposed strategy:
- They would implement two tax strategies identified to free up more cash.
- They would convert a portion of their assets to a structured product that would guarantee them a fixed monthly amount, enough for their monthly expenses.
- A portion of their assets would remain invested in stocks, to help them still achieve growth now that their monthly costs were funded.
- They would wait and file for social security later, which would increase the amount expected, and that money would be used to fund their future healthcare costs.
- An estate planning strategy was created that would shelter most of their assets from any potential creditors, as well as save them tax money now (and later, save their heirs money).
Prime Wealth Advisors presented this to the clients, and they agreed to implement it. This new strategy allowed them to sleep soundly at night regardless of interest rates and market events. They continue to meet with the Prime Wealth team regularly for routine tax planning to ensure they are minimizing their tax liability, as well as for tax preparation, keeping things simple for them.
Call 623.77.PRIME or visit our website for more information.
