The Client
Client: Kevin + Winnie
Age: 58 / 57
Occupation: GS-15 Manager / Homemaker
Primary Goal: Plan for retirement within five years, manage TSP withdrawals, and decide on Social Security timing
The Situation
Kevin is a GS-15 federal manager nearing retirement, while his wife Winnie has spent much of her career as a homemaker, supporting their family. As Kevin approaches his planned retirement date, they want to ensure their financial plan is solid. They’ve been contributing to Kevin’s TSP for years, but they’re unsure how to structure withdrawals to maximize their retirement income.
In addition, they need to decide on the best time to claim Social Security benefits for both of them, as well as evaluate Kevin’s FEGLI (Federal Employees’ Group Life Insurance) coverage to determine if it’s still necessary after retirement. With adult children and potential grandchildren in the future, Kevin and Winnie also want to ensure their estate plans are up to date. They’re looking for a comprehensive plan that simplifies the retirement transition and gives them the confidence to enjoy this next stage of life.
The Approach
To help Kevin and Winnie feel secure about their retirement, we focused on creating a detailed, personalized plan:
- Retirement Income Planning:
We developed a strategy for TSP withdrawals, balancing required minimum distributions (RMDs) and cash flow needs while minimizing tax implications. - Social Security Optimization:
We analyzed different scenarios for claiming Social Security benefits, determining the optimal timing to maximize lifetime income for both Kevin and Winnie. - Insurance Review:
We evaluated Kevin’s FEGLI coverage and other insurance needs to ensure they had the right amount of protection without overpaying for unnecessary policies. - Estate Planning:
We reviewed and updated their estate plan, including wills, beneficiary designations, and powers of attorney, to ensure their wishes were clearly documented and their family was protected. - Investment Strategy:
We rebalanced their investment portfolio to align with their timeline and risk tolerance, shifting toward income-generating investments while maintaining enough growth to keep up with inflation. - Expense Analysis:
We helped them project their pre-retirement and post-retirement expenses to ensure their savings could sustain their lifestyle, including travel and family visits.
The Results
Kevin and Winnie now have a clear and actionable plan that makes their retirement transition seamless and secure:
- TSP Withdrawals: A tax-efficient strategy ensures they can maintain their desired lifestyle while preserving their savings for the long term.
- Social Security Timing: A tailored claiming strategy maximizes their lifetime benefits and provides stable income for both of them.
- Insurance Adjustments: They now have the appropriate level of coverage, reducing unnecessary expenses.
- Estate Plan Updates: Their estate plan reflects their current wishes, ensuring their family is cared for in the future.
- Investment Alignment: Their portfolio is balanced to provide income and growth, keeping them financially stable throughout retirement.
- Peace of Mind: Kevin and Winnie feel confident and prepared to enjoy their retirement years, knowing their financial plan is secure and adaptable to any changes that may arise.
DISCLAIMER: To protect client privacy, these case studies are hypothetical examples that illustrate the types of financial planning strategies we may recommend. Every financial situation is unique, and no guarantees can be made regarding future outcomes. Please consult a licensed financial professional (like Norsu) for advice tailored to your individual needs.
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