I Recently Experienced a Financial Windfall
Inheritance and Early Retirement
An unforeseen opportunity has changed my financial picture. How do I use it to create and secure a future for myself and my family?
Congratulations. If you’re reading this it’s likely that you’ve done the right things to put yourself in a good place to retire. You may not feel that way now. That’s normal. Many of our clients don’t feel that way either at first. But after working with us to envision and create a well-planned retirement, they feel confident and excited about their futures. (Well-planned does not mean this is going to be hard. We don’t think it will be.)
In this example, Kate’s parents left her with an inheritance. Kate always had an idea that she’d probably receive something from her parents, but this was a surprise. She wants to make sure she’s a good steward of this money and makes wise choices with it. She’d like guidance on what’s the best use of this money, including possibly adding it to her retirement funds.
Kate, age 59, recently received an inheritance and wants to explore the idea of retiring sooner than she had planned.
She is an administrator at a local university and had originally planned to retire at around age 67. Her mother recently passed away and her parents’ estate has now been passed to her with an inheritance of around $800,000 in investments and savings. Kate had saved around $350,000 in her own retirement accounts and has $50,000 in other savings. She will also have Social Security and a small pension from the university but will not be eligible for either for several years.
Kate is concerned that if she retires early, she will lose her health insurance. She also is concerned that her income from Social Security and her pension will be less because of taking them early. She has a dream of starting a photography business and would also like to reserve some capital to start that, as well. Kate wants to know if retiring early is possible and what it would mean for her.
After getting to know Kate, Hunt Country Wealth Management will design a Sovereign Series™ Retirement Plan with Guided Investing™ advice with the following goals:
- Understand the pros and cons of retiring now versus later.
- Guidance on if retiring now is realistic based on facts and retirement planning best practices.
- Understand the investments she inherited – risk levels, taxes, etc., and how they might fit into her financial plan.
- Understand her pension eligibility and how retiring early may affect her retirement benefits.
- Explore the possibility of funding her new business venture
Analysis for retiring early would include how to:
- Defuse the risk of a bad stock market derailing their retirement.
- Optimize their Social Security and their pension plan.
- Preserve their principal.
- Protect their standard of living against inflation by planning for a rising income for 30 years of retirement and beyond.
- Plan for health insurance costs until they reach age 65 and qualify for Medicare.
- Show exactly which retirement savings accounts to use first, when and how.
- Create a system for how their income will be directly deposited in their bank account and taxes will be withheld.
Expected Results for Kate:
- Kate knows if retiring early is a wise decision.
- She knows the tradeoffs of retiring early versus waiting.
- She knows how much income she can expect.
- When she does retire, whether early or at her original retirement date, she will have confidence that she made an educated decision based on facts.
- She will know she was a good steward of her inheritance.
- With HCWM by her side, planning was easier than she thought.
Read Additional Scenarios:
Retirement Scenario | I’m Ready to Retire
Retirement Scenario | I Plan to Retire Early
Retirement Scenario | I Plan to Retire in Three-to-Five Years
Retirement Scenario | I Recently Lost My Spouse
Retirement Scenario | I Have a Dependent Child
We believe retirement should free you. It all starts with a plan.
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