Balancing the tax and college funding implications of a windfall:
A client couple moved to North Carolina after realizing a windfall sale of a real estate property before the financial crisis and bought a house without taking out a mortgage and still had sizeable assets in a taxable brokerage account. They had two elementary school children who were academically precocious. Their household income in itself was not high enough to disqualify them from need-based financial aid at upper tier private universities, and their retirement savings were low. Red Reef's team helped them design and implement a strategy to increase their retirement assets over time while reducing the taxable portion of their household balance sheet – which includes the equity in their home – to increase the probability that they might qualify for need-based financial aid if their child achieves her academic potential.
Thinking through career downshifting in the context of other planning goals:
A client and his wife had worked hard for years and had saved money diligently. They had a few goals:
To work less at some point in time in the future
To take more and better vacations
To do an addition on their house
Plus they had kids to send to college.
Sorting all the interdependencies of seemingly conflicting financial goals is an incredibly complex process, particularly when it has to be done within the context of the eternal ebb and flow of the capital markets. Utilizing state-of-the-art financial planning software which runs thousands of simulations of various market events over multiple decades, our team works with our clients over time to iteratively model different saving and spending scenarios to help them understand their probable ability to achieve all their goals. Now that these clients better understand where they are financially, they are having more fun.