Evelyn & Todd: Retiring
Occupation: Own a construction company, late 60's, looking to sell business
Objective: Sell business within the year, live off investments
Concerns: What if there’s a market crash once I sell my business?
Risk Appetite: Only to the extent it’s necessary
Investing Experience: Over 20 years
Evelyn and Todd have been working together for over 35 years. She was the secretary at a fencing company and he was one of the engineers. A few years after meeting, they decided to leave and start their own construction company. They are used to taking business risks but now they are headed into unchartered territory.
Evelyn and Todd have built a substantial nest egg over the last 20 plus years. Their current investments portfolio in addition to the expected after tax sale proceeds should give them a very comfortable retirement. Although they know they can't sit on cash, they are concerned about the high valuations in the stock market and what happens if they are faced with a market crash in retirement.
Wealth Plan
We started with a brainstorming of how Evelyn and Todd envisioned their lives to look like once they sold their business. Where they would live, who would they spend their time with and how would they recreate a routine that would make them happy.
We came up with a realistic spending pattern and a plan to recreate a steady, predictable "salary" coming from their investments instead of their business.
We forecasted what their tax bracket would be before and after the business sale and made a plan for how to distribute from their portfolio in the best after tax way.
We also talked about a potential stock market crash; what could cause it, how bad could it be, how would their portfolio realistically react and how would their lifestyle be affected. Once Evelyn and Todd realized they wouldn't be selling into a down market even if the market crashed, they felt more comfortable. We talked about acceptable risks and laid out in dollars and cents what this means for them.
Once they were comfortable, we built a tailored portfolio in line with their guidelines.
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