Picture this:
You’re in your office, preparing to finally hand in your notice and enter the retirement you’ve worked so hard to achieve. You’ve reached your professional goals. You’ve helped your children establish successful lives. Now, you’re finally ready to relax, but you need one last vote of confidence. So, you compare your investment account balances to some “general benchmarks” for retirement readiness, and your retirement dreams shatter around you.
This is what happened to one of our clients. Fortunately, the team at Meld Financial was able to address her concerns and help her enter retirement with confidence. This case study will cover the misconceptions that shaped her original retirement plan, the adjustments we helped her make, and how you can use the valuable information in this story to avoid working longer than you must.
Case Study Rationale: Why study and share this situation?
Many working people struggle with the transition into retirement. To make matters worse, abundant misinformation about the amount of assets needed to fund a comfortable retirement creates unnecessary anxiety.
I’m Blake May, J.D., CFP®, Partner at Meld Financial, and I recently had the exciting opportunity to help a client confront her misconceptions and finally enter retirement with peace of mind. I hope that sharing her story will help you:
- recognize misleading “rules of thumb” in financial planning.
- understand the value of a second opinion on your retirement plan.
- gain the tools you need to enter retirement with confidence.
The Client: A Single Mom Dreaming of Retirement
For the purposes of this case study, I will refer to the client as Jane Doe. Jane is a single mom who has worked hard to provide a comfortable life for herself and her children.
When I met Jane, she was mentally ready to hang up her professional hat and have more time to travel and spend with family. However, she believed that she wasn’t financially prepared to retire despite her decades of saving.
The Problem: Misconceptions Led to Undue Stress About Retirement Readiness
Jane had two common beliefs that were holding her back from the plunge into retirement. First, she believed that annuities were the only way to provide retirement income. She was not aware that this strategy would prevent her from accessing the majority of her cash without penalty or that there were other options to generate income from her investments.
The second misconception that prevented Jane from retiring was a belief that she needed to pay off her mortgage before entering retirement. She was aggressively working toward this goal, unaware that her circumstances made it unnecessary.
Both of these misconceptions are common and keep many people working when they could be enjoying retirement instead. Fortunately, Jane decided to seek a second opinion from Meld Financial.
The Solution: Financial Fingerprint® Provided A Pathway to Retirement Success
I met with Jane to discuss her income, expenses, and investments. Once I understood her situation, I developed her Financial Fingerprint® – a comprehensive wealth management program that brings together the most important aspects of a successful retirement in one easy-to-understand plan.
As a part of her Financial Fingerprint®, I calculated Jane’s Required Rate of Return™ [RRoR™]. This figure shows the amount her investments need to earn to bridge the gap between her guaranteed income and estimated retirement expenses. Both Jane and I were delighted to learn that her RRoR™ was feasible given her current assets – meaning she was ready to retire!
I also helped Jane weigh the pros and cons of annuities compared to other income-generating investments. We discussed the safety and liquidity of each, and Jane chose to pursue a portfolio that provided access to her money at any time without penalty.
Finally, I reviewed Jane’s current mortgage and found that the interest rate was only 2.75%. I showed her that she could choose not to pay off her mortgage immediately and instead invest those funds and collect income that would more than offset the interest she paid toward the loan.
The Outcome: A Stress-Free Retirement Filled with Travel and Family Time
Jane was thrilled to learn that she was ready to retire – even without paying off her mortgage. She officially submitted her notice in early 2024 and entered retirement with peace of mind.
Without Financial Fingerprint®, Jane may have spent years continuing to work toward goals that did not align with her reality. Thankfully, she chose to meet with Meld Financial and has instead been enjoying travel and more time with her family.
Are You Ready to Retire? Learn the Answer with Financial Fingerprint®
At Meld Financial, our team will develop your Financial Fingerprint® and help you determine when you are ready to retire. This nimble plan is completely customized to your situation and includes an analysis of your income, expenses, and investments.
It only takes about an hour to craft your Financial Fingerprint®, so there is no reason to delay. Contact a member of our team to schedule your meeting today!
This testimonial was given by a current Meld client. Meld did not compensate them directly or indirectly for the testimonial provided herein. The rate of return needed is based on the client’s specific situation and the results achieved do not guarantee future investment results.
