Tony and Carla 

Case facts:

  • Tony and Carla retired 8 years ago when he was 63, she was 62
  • They had run a successful, medium size printing business in Pittsburgh which they sold before retiring to North Carolina
  • They have 3 grown children, one of whom, a daughter, lives in the area.
  • They are both in fairly good health, though Tony has some blood pressure and cholesterol concerns.  Carla’s family tends to be quite long-lived.
  • Since moving to NC, they’ve purchased a condo, found a church they like, met some fellow transplants who have become friends, and have become active volunteers in the community
  • They travel some- mainly to visit grandchildren but they take at least one “major” trip a year.  They want to make up for what they missed working the long hours in the business.
  • Their investment portfolio took a hit during the 2008-2009 financial collapse and still hasn’t recovered
  • Their concerns include:
    • Can they afford to continue the lifestyle to which they’ve become accustomed?
    • They would like to take the whole family on an all-expense-paid cruise.  Can they afford that?
    • Will their money last if Carla lives to 97 or 98 like her aunts and mother?
    • What happens if Tony gets sick?  How do they pay for that?  Will Carla be able to manage the finances?
    • How should they plan their estate?  Should they split it equally between the children, give some to their grandchildren (now, later), and what about the Church and the groups they volunteer for?

When we first met, Tony and Carla were a couple enjoying retirement.  They had worked hard and put money aside. They had made a lot of changes since selling their business, the biggest of which was relocating South to leave the snow behind. The change went well and they got to see their daughter and some of their grandchildren on a regular basis.  But they had some questions and concerns.  They didn’t have a good feel for how they were doing financially in retirement.  And their biggest fear was the one most retirees face- is the money going to last.  They had things they wanted to do- travel, the family cruise, giving to church and charities- but they didn’t know if the could afford to do it.

We started by discussing the plans they had and quantifying their goals.  I helped them prioritize their goals- living expenses, healthcare funds, travel for them/their family, giving to church, etc.  Then we looked at their finances- their insurance, debt (none), investment portfolio, daily living expenses and travel costs- to see where they stood.  I then ran projections for them, assuming Carla inherited the family genes for a long life, to see if their spending pattern was sustainable.

Among the things we determined were:

  • They were living within their means for their daily living expenses
  • Their personal travel was a bit high but likely sustainable
  • The cruise they were thinking about was probably not within their means, as they were planning it
  • A significant illness and medical costs for Tony could be financially harmful to them
  • Their investment portfolio was too risky and subject to loses they couldn’t afford

I then helped them to work on making changes.  Their portfolio was reallocated to a more conservative one.   Carla put in place long-term care insurance to provide for her care in old-age.  I suggested, and helped them plan, a family gathering to the NC coast where they rented a place for all of them.  The cost was more reasonable. The family was together. The grandchildren loved the ocean.  And then, along with their attorney, we helped them develop an estate plan that accommodated their competing interests- their needs, something for the family, and something for their church and charities.  We review these plans periodically to account for changes in plans or circumstances, which gives them comfort that they are taking care of their finances wisely.