Our clients, a young, high-earning couple, recently welcomed their first child. Because they were juggling between demanding jobs and taking care of their newborn, they were too busy to manage their own investments and develop a clear long-term financial strategy. They needed a plan to maximize their retirement savings and grow their investments, but they also needed funds to pay down the student debt they accrued. Additionally, they wanted to grow their savings for both a new home and college for the new addition to the family. While they wanted their investments to work hard for them, they did not want to see their savings go through a high degree of volatility in down markets — especially with so many new demands on their hard-earned income.
Our new clients were ready to retire. For many years they worked hard in order to put their children through college and accumulate their savings in an investment portfolio. Though they believed they had saved enough to provide for a comfortable retirement income stream from their investments, they remained apprehensive about market risk. While they understood the need to protect against inflation, they were still concerned about how a severe bear market would affect their investments and the success of their retirement plans. In addition, the couple needed help to determine how much income could be withdrawn from their portfolio without depleting its principal too quickly—especially considering they had no intention of rejoining the workforce.
Our client amassed a significant stock concentration from an IPO and spent many years at a publicly traded company. He felt confident about the long-term prospects of the company, but was also aware of the significant risks of holding a concentrated single-stock position. Our client worked hard to amass his wealth and wanted to protect what he earned, but the realities of capital gains taxes coupled with his lack of expertise on diversified investment strategies and alternatives ultimately prevented him from taking action.