Case Study 2

Approaching Retirement:

Monique & Martin

Ages: 56 & 60

Main Goals

Tax optimization strategy for exercising stock options, fund purchase of 2nd home, pay down primary mortgage and retirement options.

Monique and Martin are financial do-it-yourselfers. Monique left her consulting job to work for a tech start-up company which shows significant potential for growth and Martin works part-time for the government. Monique was awarded employer stock compensation, Incentive stock options (ISOs) and Non-Qualified stock options (NQSOs), that vest annually. They contribute extensively to their children’s 529 plans to fund undergraduate and graduate degrees as they value higher education. They want to make sure they have enough for retirement at 80% of their current income. They don’t want to give up control over their assets but know they need guidance with asset allocation and navigating the tax consequences of the stock compensation. They also dream of having a vacation home as a family gathering place; space for the family to gather as they grow.

The Plan Outcomes provided Monique and Martin the following:

• Tax optimization strategy for stock option exercise considering the conversion of ordinary income to long-term capital gain, the Alternative Minimum Tax (AMT) limits and the concentration of employer stock in their portfolio.
• Funding strategy to purchase the vacation home.
• Martin increased his pension benefits by going back to work full-time now that their youngest child is in college increasing retirement cash flow.
• Increase cash flow during retirement by following a mortgage pay down plan.
• Monitor and assess their asset allocation while they control their investments.

We collaborated with Monique and Martin to fit together all of the moving puzzle pieces of their life. They now have a cohesive approach to move forward to achieve their goals.