Preparing for retirement can be a daunting challenge, but careful planning and ongoing engagement help mitigate financial uncertainty as you transition to a new chapter of your life.

The Scenario:

A husband and wife approached us for investment management services as they approached retirement.  The husband still had additional income from a part-time side business, and the wife was preparing to sell her interest in a family-run business.

The couple needed additional income from their portfolio to supplement their current salaries, but they wanted to manage the distributions in a dynamic way to avoid eating into principal and staying invested according to their risk tolerance.

The couple is very active and they travel often.  They needed an advisor who understood their needs and goals, and that was able to put a plan into motion that was flexible enough to adapt to their on-the-go lifestyle.


The couple wasn’t necessarily interested in a comprehensive financial plan at first, and we understood that.  Often, financial plans are viewed as a list of “thou shalt” and “thou shalt not” instructions.  That’s pretty far from the truth.  We highlighted the benefits of a flexible plan that our team and the clients worked on together — benefits like a dynamic spending and budgeting plan that adjusted to portfolio performance and annual client needs.  We didn’t need to build a plan immediately, and the clients weren’t interested in rushing into a plan… but they eventually understood the value that a living, breathing financial plan brings to their lifestyle.

We found that the couple’s portfolios were invested too aggressively based on their quantified risk tolerance.  This created an opportunity to manage expectations from the perspective of risk versus reward.  The clients could bear more risk for an expected level of return, they could reduce the distributions they were taking from their portfolio, use a combination of both techniques, or manage their spending in a more dynamic fashion.  Their portfolios also had a lot of expensive mutual funds that needed to be removed.  We worked with their CPA to develop a liquidation strategy that was efficient from a tax perspective and constructed new portfolios. 


  • Ongoing planning was a huge component of this scenario.  The couple’s financial situation is complex, and their desire to avoid a big commitment of time up-front to develop the plan was something we understood and respected.  We developed a rolling calendar of planning events that addressed the various elements of their finances.  After all, the only way to eat an elephant is one bit at a time.
  • Educating the clients on total return was a big shift from their previous advisor’s focus on dividend funds.  Total return is the sum of all the parts of an investment — the capital gains, the dividends, the interest… everything.  In an environment of low interest rates, chasing yield inevitably exposes investors to risks they weren’t thinking about.  A diversified and risk-managed portfolio helps avoid these stumbling blocks.
  • An account distribution plan — or the sequence of account liquidations — allowed us to build various time horizons into their portfolios.  Said another way, withdrawing from one type of account (like a taxable) first and then another one later (like a Roth IRA) has tax benefits and allows us to invest across different time spans.  This allows us to “ladder” risk based on expected time periods.