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Retirement Planning Case Studies

Helping Munson Healthcare Nurses in Traverse City Retire With Confidence

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By: Trent Grzegorczyk

Meet Jennifer. She is 63 and recently retired from Munson Medical Center in Traverse City, Michigan. Jennifer has been a nurse for over 30 years and decided that 2020 was the year that she would officially retire. You can learn more about retiring early during a recession in our other blog post.

Jennifer's main financial goal is to be able to make her retirement savings last over the course of her retirement, and generate a sustainable income stream from her investments to supplement her Munson Healthcare pension and Social Security retirement benefits.

Her biggest struggle

Jennifer is a widow, and her late husband handled their entire financial picture, from paying bills, creating a budget, to managing their retirement savings. Jennifer was overwhelmed with all of this. The finance jargon was confusing for her and she wasn't sure who to trust for advice. Jennifer had a few conversations with local financial advisors, but never felt like they really listened to her or were acting in her best interest. No one seemed to be willing enough to really dive deep into her situation. She was committed to finding a financial advisor who was a fiduciary, who could provide her with conflict free and honest retirement planning solutions.

Jennifer questioned whether or not her retirement savings would be enough to maintain the lifestyle she was used to, and worried that she would have to create a restrictive budget or maybe even have to sell her home. You can use our Retirement Readiness calculator to see if you are on track. She knew that she needed to simplify her wealth management by consolidating her various IRAs and old 401(k)s to one custodian, but wasn’t sure who to pick. Jennifer confidently decided to hire us as her personal retirement planner. Here is a summary of our journey together over the last few months.

Initial facts

Net worth$1,000,000
Investment portfolio$590,000
Asset allocation20% stocks, 80% bonds

The process

We started by getting Jennifer's financial life organized by using our wealth management system. This way, Jennifer has a simple way to manage all of her accounts, track her goals, and monitor her financial health all in one place. Once everything was organized and she was comfortable using her new retirement planning system, we began to analyze her situation. Our team ran various illustrations to show Jennifer how everything looked if we kept everything as is, and didn't modify anything. After explaining the pitfalls and missed opportunities, we presented a few solutions that would be more efficient based on her needs, goals, risk tolerance and time horizon. We even showed Jennifer how another pandemic like COVID-19, might impact her portfolio and retirement spending in the future, and showed her what it would take to break her plans.

Conclusion

  • For Jennifer to maintain her current lifestyle throughout her retirement, we decided that her retirement living expenses should not exceed $50,000 per year, adjusted for inflation. This amount excludes taxes, insurance premiums and liability payments. 
  • We modified her investment strategy to include slightly more stock exposure through diversified ETFs to increase her long-term growth potential. This will also help offset distributions from her IRAs.
  • She will delay taking her Social Security retirement benefits until full retirement age (FRA). This way, she will receive a larger monthly benefit and will have greater spending power. In the meantime, Jennifer will take periodic distributions from her retirement savings.
  • The probability of successfully funding her entire 25+ years of retirement is projected to be over 85%, and should increase each year as her investments grow.

8 months later

Net worth$1,100,000
Investment portfolio$660,000
Asset allocation33% stocks, 67% fixed income

< View Jennifer's investment portfolio here >


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Disclosure: These are hypothetical examples based on actual client situations and how we provide retirement planning services. All examples on our site are for educational purposes only and should not be taken as investment or financial advice.



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