Nearing Retirement – Johnson Lyman Wealth Advisors

Preparing for Retirement

Biotech executive nearing retirement

SERENA

Age: 61

After diligently accumulating wealth over the years as a biotech executive, Serena is finally thinking about the possibility of retirement. She’s had a rewarding career at multiple companies, but the current pace is grueling, and she’s ready to take a break.

She has a variety of investment accounts, including currently vested stock options and RSUs at her current employer, multiple 401(k)s from her current and prior employers, and multiple taxable brokerage accounts.

She has two adult children and two grandchildren who live locally. Although she’s been very successful financially, she prefers to live more modestly. She owns her own home and is looking forward to spending more time with her family and grandkids.

The Challenge:

Serena was reasonably confident that she had enough to retire, but she wasn’t sure how to judge, especially since the market had been quite volatile recently. She wanted to reliably generate income for the rest of her life, but this goal created more questions than answers:

How to invest to generate my needed retirement income?
How to make sure taxes don’t take too big a bite?
How to switch from working and saving to living off my investments?
How do I coordinate health care, especially since I’m retiring before Medicare age?

Serena knew she wanted someone who could evaluate her entire financial picture – someone that could work with her to develop a plan she could confidently “buy into.” It was never a question that she would engage a professional for this very important transition. She chose Johnson Lyman Wealth Advisors, a firm that has deep expertise in designing lifetime retirement income plans to help her holistically plan for her future.

The Approach:

The first step was to sit down and listen to Serena’s questions and concerns. She wanted to be heard.

Once her goals were clearly documented, a personalized retirement plan that aligned with her values and priorities was created:

Development of a stochastic financial model which illustrated how Serena could satisfy her key goals as well as maintain a sustainable lifestyle spending level.
Establishment of a retirement timeline that included optimized benefit elections of Social Security & Medicare
Implementing a disciplined investment strategy that allowed her to invest prudently and in line with her values around environmental sustainability, including:
- A globally diversified approach that also significantly reduced exposure to greenhouse gas emissions.
- A tax-efficient strategy that reduces risk and improves returns.
- An improved asset allocation for her portfolio.
- Significantly lowered investment costs.
- A smart, sustainable rebalancing strategy.
Reduction of lifetime income taxes by taking advantage of the window before her income grows substantially at age 70 (when Social Security kicks in) and age 72 (when required minimum distributions start). She can both exercise and sell her remaining options and RSUs as well as make Roth contributions to increase income and take advantage of lower income tax brackets during this window. Over time, we coordinated Serina’s retirement income from a variety of sources:
- Social Security
- Pension (from a prior employer)
- Inherited IRA
- Roth IRA conversions (when prudent)
- Exercise and sale of remaining options and RSUs
- Additional withdrawals from taxable, non-retirement savings

The Results:

Today, Serena is having the time of her life. She has time to spend with her family and grandchildren as well as travelling with friends.

Serena is also glad to have ongoing support to review her plan regularly, knowing that she is able to stay on top of any changes in tax and estate law. She delights in the simplicity of reviewing the results of her financial model and investments in her client portal.

She has confidence that her plan is sustainable, which allows her to relax and enjoy her life on her own terms. This confidence creates space for her to live life as fully as she desires.