Even millionaires need help knowing what the next right step is.
James and Heather, age 51, Atlanta, GA
James is a senior manager for Home Depot.
Heather is a nurse working part-time.
A combined annual salary of $216,000, and James also received cash bonuses of $200,000 and annual stock awards of $50,000.
They have two daughters, and one has special needs.
Their net worth is currently $1.8M, including their house.
They give ten percent of their income to their church, support a local children’s charity and contribute to Duke University (their alma mater) with annual gifts of about $10,000.
Challenge: What is the next step needed to get the right results?
James and Heather are ready to accelerate to full-on financial independence and work-optional status. However, with big career and family commitments, financial planning and investment management have often fallen to the bottom of their (extensive) to-do lists. Now they have two daughters in their late teens, and college funding is also top of mind. They are uncertain about which goal to tackle first, and it’s creating some tension.
Solution: Miner Wealth Management gives clarity and focus to competing goals.
With three significant but competing priorities, James and Heather partnered with Miner Wealth Management to clarify their direction and steps to get there.
Matt Miner met with the couple and looked over their family balance sheet. James and Heather had a high income and significant assets in their employer plans, some money in IRAs, Roth IRAs, and a taxable brokerage account.
First, Matt worked with them to optimize for taxes. This included taking advantage of available catch-up contributions in James’s 401(k) and Heather’s 403(b) plans. It also included adjusting their health coverage through their employers to decrease their insurance premium payments and contribute to a new HSA, saving more money on Georgia state income tax, federal taxes, and Medicare payroll taxes.
Matt also advised the couple to use a donor-advised fund to bundle several years of giving into a single year (claiming the standard deduction in other years), increasing the value of their charitable tax deduction.
Next, Matt worked with James and Heather to optimize their investments across their accounts. He showed them how to hold the right investments in the right accounts, optimize their cash holdings for their actual needs, and adjust their investment allocation to suit their goals.
Matt’s analysis showed James and Heather that their daughter's college was already fully funded between cash flow and amounts already contributed to their 529 accounts. Matt also provided the couple with a referral to an estate planning attorney with significant experience planning for families where children have special needs.
Results: A good financial plan simplifies the confusion when there are competing goals.
Substantial income provides considerable opportunity. It’s perfectly alright to tackle more than one goal at a time when you have the financial margin to support it. It just requires a clear plan, close attention, and taking multiple actionable steps at a time.
Having the plan to tackle these goals allowed James and Heather to:
Increase their pre-tax savings by $15,000.
Contribute $7,750 in a HSA.
Increase their savings rate by 5% of their income.
Drop their tax bill by around $9,000 per year.
Reduce their emergency fund to $100,000 and increase their investment contributions with the surplus.
Create a 0.8% increase in their annual expected investment return after fund expenses and advisor fees.
Have confidence that their estate plan addresses their long-term concerns for their daughters.
Improve the couple’s communication, clarify their goals, and promote collaboration, bringing the family closer. They are currently saving for their 30th wedding anniversary trip – a Mediterranean cruise for the whole family to enjoy.
Contact us to schedule a free, 20-minute consultation to discuss your (one or many) needs and goals for your money.
