After decades of building a career, the hardest part isn't knowing when to retire. It's knowing how.
A client came to us after a long career as a high-level executive, ready to step away at the top of her game. As a single woman, every decision rested on her shoulders alone: no spouse's income to fall back on, no second Social Security check, no one else to weigh in on the tradeoffs. She had accumulated a pension, a concentrated stock position in her longtime employer, a deferred compensation payout, a 401(k), and real estate, all of which needed to work together the moment her last paycheck stopped. The complexity was significant: a high-income final year, a seven-figure deferred compensation distribution arriving the following year, Social Security timing decisions, and a deeply held conviction that after a lifetime of hard work, she should be able to enjoy her money without feeling guilty about it.
Our job wasn't to hand her the mathematically optimal answer. It was to work with her in partnership, laying out the full range of her options, from maximum optimization on one end to what actually brought her peace of mind on the other, so she could see the tradeoffs clearly and choose what made a difference in her daily life.
We guided her pension election. We modeled the single life annuity against a life insurance alternative for people she cared about. On paper, several paths were defensible. What mattered was that she understood each one, so the decision was hers, made with clarity instead of pressure.
We engineered her tax runway. With a high marginal rate in her final working year and a large, deferred compensation payout on the horizon, we built a multi-year tax projection, set her withholding, and established quarterly estimated payments to eliminate year-end surprises.
We timed Social Security around her life, not just the math. Waiting until 70 would have maximized her lifetime benefit. But when we walked through the tradeoff together, she valued a stable paycheck now over a bigger number later. We showed her exactly what that choice cost and what it bought her: the freedom to stop watching her account balances.
We consolidated everything into one managed portfolio. Accounts scattered across multiple custodians were brought together in one place, transferred in kind with no selling, and invested for long-term growth since her pension covers day-to-day living.
We shifted her out of concentrated stock and into a diversified portfolio. Decades of loyalty to one employer had left much of her wealth riding on a single ticker symbol. Together we built a plan to sell out of the position and redeploy the proceeds into a broadly diversified portfolio, managing the tax impact along the way, so her retirement no longer depended on the fortunes of any one company.
We set a floor so she could spend freely. We established a cash cushion and a tax-efficient municipal bond sleeve in her taxable account. That floor wasn't an optimization; it was permission. She can furnish her home, drive a new car, travel, and support her family without ever feeling like she's spending down.
The result is a plan built to last longer than she will, tested against decades of good markets and bad. But the real outcome is that she understands every decision in it because she made them with us, not because we made them for her.
DISCLOSURES:
The scenarios described are illustrative and reflect composite situations based on actual client experiences, with identifying details and figures changed. They are provided for informational purposes only, are not representative of the experience of all clients, are not a guarantee of future results, and individual results will vary based on each client's specific circumstances.
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.
Consilio Wealth Advisors, LLC ("CWA") is an investment adviser registered with the U.S. Securities and Exchange Commission ("SEC"). Registration does not imply any particular level of skill or training. CWA provides investment advisory services to clients nationally and notice-files in those states where notice filing is required. CWA renders individualized responses to persons in a particular state only after complying with all applicable regulatory requirements, or pursuant to an applicable exemption or exclusion.
