David J. Blount, CFP®
LPL Financial Advisor
There’s no such thing as one-size-fits-all financial planning. Every one of our clients comes to our firm with a unique set of circumstances and concerns about their financial future.
Let’s take a look at the individual cases of two hypothetical L3Harris employees who are based on our fifteen years of experience in working with the same. We hope to highlight how our clients have benefited from our customized financial planning services.
Case Study 1: Retirement Confidence for a Single Woman
Nancy Jacobs is in her 60s, single, previously married, and has adult children and grandchildren.
Nancy recently contacted Investment & Insurance Planning Services because she had some concerns about her financial security and wanted a plan that would provide more confidence in her future. While she has been smart with her money so far, she wanted to explore her options for optimizing her current money management strategies, creating a retirement income plan, and avoiding burdening her children.
Specifically, Nancy had questions like:
Am I investing enough and how should I invest in my company’s 401(k) plan?
How do I consolidate my 401(k) and my IRA?
Am I eligible to receive Social Security benefits from my former husband’s record?
What are my options for long-term care as I age?
Nancy was motivated to reach out to us when she realized that as she gets older, she needs a professional partner who can help her navigate a financial path to a confident future retirement. Through our discovery process, we were able to understand Nancy’s concerns and provide a financial plan that she could put in place immediately.
Nancy’s Path Forward
To refine Nancy’s financial goals collaboratively, we worked through our three-step financial planning process of discovery, plan presentation, and plan implementation. Nancy was able to not only get answers to her questions but also see what was financially feasible moving forward.
When she first came to us, Nancy wasn’t entirely sure at what age she wanted to retire, so we created three financial plans for her to retire at ages 67, 70, and 72. Ultimately, she hopes to retire on her own terms when she’s ready. Even though she’s not sure yet which plan she'll use, Nancy told us she’s much happier knowing the possible income she could generate at each of those three ages.
Here are the additional financial strategies that we recommended for Nancy:
We helped her pick up a Social Security retirement benefit off her former husband’s record at age 65. This news gave her the ability to create more lifestyle comfort for herself and add to her retirement savings through a Roth IRA.
We helped her reallocate her 401(k) investments, so they aligned more closely with her financial plan and risk preferences.
We implemented an annuity into her planning to provide guaranteed income for life.
We executed rollovers of her old 401(k) to new IRAs.
Case Study 2: Security for a Small Business Owner
Brenda Andrews worked at L3Harris as a director and left the company to start her own successful business. Brenda’s husband, Ron, worked as a teacher for many years and as a result, has an FRS pension. In her mid-50s, Brenda and her husband have two children.
When Brenda started her business, she set it up as a Limited Liability Corporation (LLC) which gave her liability protection. Just as important, it gave her the flexibility to file her taxes as either a sole proprietor or as an S Corporation. Depending on how much income a business
makes in the early years, this flexibility can make a big difference at tax time.
Fortunately for Brenda, she did quite well and was soon able to earn more income than she did at L3Harris and enjoy more flexibility as her own boss; she could work wherever and with whomever she desired.
The Andrews came to us with several concerns:
How can we make the most of Ron’s FRS pension?
Should we keep Brenda’s business in the family, sell it, or pull value from it during retirement?
If we decide to keep the business, how should we incentivize it? Should we insure key personnel?
How should we plan our taxes based on high income from the business?
Brenda’s Path Forward
After listening to their concerns, we knew that the Andrews needed a comprehensive financial plan to address their needs. To further enhance her business acumen and financial goals, Brenda and her husband completed our three-step financial planning process of discovery, plan presentation, and plan implementation. She was able to get her questions answered and discern what was feasible for moving toward a confident retirement as a small business owner. Here are the highlights of her financial plan.
Business ownership: One of Brenda’s lingering concerns was how best to save for retirement as a self-employed business owner. To help, we implemented an individual 401(k) plan for her during the first few years she was in business. Then, as she added employees, we changed that plan over to a Safe Harbor 401(k) plan. We also transferred her L3Harris Fidelity 401(k) plan account into her new individual 401(k) which we set up for her. We continued providing our specialized services by managing those assets in collaboration with her financial plan.
Retirement pension: Brenda’s husband, Ron, was in the FRS pension plan and anticipated keeping this as is during retirement. He will most likely enter the FRS DROP program five years prior to retiring, and then roll the proceeds into an IRA upon completion.
Insurance: We implemented a long-term disability insurance policy for Brenda in case she becomes sick or injured and unable to work. This insurance would still provide income to her household in the event she isn’t able to work.
Taxes: To lessen their tax burden, we also implemented a tax-deferred retirement plan to replace Brenda’s L3Harris savings plan options and create additional tax deductions.
Need Help?
At Investment & Insurance Planning Services, we commonly navigate situations such as these. Click here to read two more case studies of how we helped L3Harris employees.
Most of our clients come from a professional background and are experiencing a career transition such as retirement, job change, starting a business, or just wanting to be more intentional about planning their financial future. As their financial partner, one of our top priorities is to provide each with personalized financial guidance that aligns with their unique concerns and needs.
To schedule a complimentary call to discuss your current financial planning considerations or investment concerns and see if our services match your needs, contact us today at service@davidblountIIPS.com or (407) 542-3249. You can also send us a message here.
About David
David is President and CEO of Investment & Insurance Planning Services, LLC (IIPS), an independent and fee-based firm that helps clients establish their financial goals and creates custom financial plans to help them pursue those goals. They specialize in working with pre-retirees, individuals in a career transition, L3Harris engineers, and JetBlue pilots. David’s motivation comes from seeing his clients pursue their goals. He says, “It’s very rewarding to help people make successful transitions from one career to another, start a small business, or retire.”
David received his bachelor’s degree from Troy University, and prior to becoming a financial planner in 2000, he had a nine-year career in the United States Coast Guard. He obtained the CERTIFIED FINANCIAL PLANNER™ designation in 2007. He has served as the guest financial expert on Orange Television’s Adult Lifestyle Magazine Show and frequently provides financial and retirement planning workshops. Outside of work, he enjoys spending time with his wife, Michelle, their two kids, Ryan and Alana, their dog, Jack, and visiting with friends. An avid outdoorsman, he enjoys fishing, hiking, exercise, and as a committed person of faith, he enjoys attending church and is passionate about helping people in his community. To learn more about David, connect with him on LinkedIn.
This material was prepared for David Blount’s use.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.
All investing involves risk including loss of principal. No strategy assures success or protects against loss.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.
A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.
Fixed and Variable annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value.