ELAINE
MANAGING PARENTS’ FINANCIALS
OCCUPATION
Fashion Designer, late 40's, mother of two and caring for her parents
OBJECTIVE
Effectively manage family’s finances
CONCERNS
How do I balance all the balls in the air?
RISK APPETITE
Only to the extent it’s necessary
INVESTING EXPERIENCE
Over 20 years
THEIR STORY
After 12 years of working as a financial analyst in New York City, Elaine took the plunge and followed her passion for fashion. She created her own fashion label and is now selling her brand online and managing a staff of five. She's married with two children, is the eldest of her two siblings, lives ten minutes away from her parents and has become the de facto financial advisor for all of her family.
Elaine's father had been managing the finances for him and Elaine's mother but after a couple of missed payments and a questionable investment decision, Elaine realized it was time for her to get involved. Elaine's parents were worried and embarrassed to involve her in their finances since she already had so much on her plate but they knew they needed Elaine's help to find the best solution.
Elaine was already the plan sponsor for her company's 401k plan, she was overseeing her children's college 529 savings plans and she was making investment decisions for her and her husband's retirement accounts but she knew managing the after tax cash flows from her parent's investment portfolio was more than she could take on right now.
WEALTH PLAN
01. ANALYSIS
We first sat down and had a lengthy joint conversation with both Elaine and her parents. It was important that Elaine's parents were not excluded from the conversation nor made to feel that they were no longer important in the decision making process for their finances.
02. BRAINSTORMING
Over the years, Elaine's parents ended up with securities at over 7 different custodians and transfer agents, we consolidated everything into one taxable and one tax deferred account.
03. NO TAX PENALTY
Elaine's father had already reached Required Minimum Distribution age. This meant he was forced to start withdrawing money from his retirement account. Luckily, we still had time to withdraw funds without incurring a tax penalty. We agreed on the best after tax way to distribute the funds.
04. BETTER INVESTMENT PLAN
We came up with a communication plan that would keep Elaine's parents involved and Elaine informed without being overwhelmed. With her parent's permission, we set up online access for Elaine so she was aware of how the investments portfolio was doing and we set up quarterly review calls with Elaine's parents so they could ask questions and feel comfortable about their investments.
We reviewed all of the parent's investments and agreed to sell some securities that were underwater and no longer made sense for their investment plan. We reinvested in other securities offering more income and growth potential.