Date: July 26, 2022

How We Helped Janice Create a Successful Retirement Plan

Janice was a new client who came to us to set up a retirement savings financial plan. She was 55 and wanted to retire in 10 years. 

Her investments for retirement were primarily in a 401(k) plan through her employer. She owned a lot of company stock. She also had an account at a major brokerage house and invested in an assortment of stocks, mutual funds, and bonds. Janice was unsure how that was working for her. 

She was thinking about changing investment advisors and was looking for a smaller, local financial advisor in Connecticut to provide the personalized retirement planning she needed to define and reach her goals. We met several times and worked out a customized retirement plan.


“At Heritage Capital, we’ve been helping people navigate retirement challenges for over three decades.”

Paul Schatz, President & CIO


Janice’s Knottiest Issues

Janice’s biggest concern was whether retiring at age 65 was feasible and smart. She understood that the answer depended on how much money she would need to retire. To that end, she needed to consider how her retirement lifestyle would impact her budget. 

Janice worked with us to identify several critical issues:

  • Budgets: Janice needed help working out two budgets – current and post-retirement. She wanted her current budget to reflect her commitment to accumulating as much money as possible to fund her retirement. Her post-retirement budget needed to show her how much income she’d require each month and whether she would outlive her money. We systematically worked through her options based on her desired lifestyle and funding sources. It was an iterative process that depended on several factors, including her income from Social Security, investments, a small pension from her employer, her retirement accounts, and a family inheritance. She also factored in a revised investment strategy and lifestyle choices.
  • Social Security: Janice wanted to delay her Social Security claim until age 70 so that she’d receive the maximum benefit. Her concern was whether she would have enough income to permit the postponement. We showed her several claiming strategies and how an earlier claim would negatively impact her future income and taxes.
  • Home: Janice owned her house, but as a divorced empty-nester, considered it unnecessarily large for her purposes. She wasn’t sure whether she wanted to relocate to another city after retiring to be near her grown daughter. In any event, she knew she wanted to downsize to a rental unit but was unsure whether she should sell her home for a solid capital gain or rent it out for monthly income. We showed her the costs and benefits of each real estate alternative and updated the information regularly as her retirement approached.
  • Part-time work: At age 55, Janice was ambivalent about whether she wanted to work part-time after retiring from her job. Her attitude evolved as the years passed, and she became more excited by the prospect. We showed her how various earning levels would affect her retirement budget. In her particular case, she fancied becoming a contract writer in her areas of expertise. This would allow her to work from home with minimal expenses and let her control how much time she would allocate to the gig.
  • Taxes: Janice was concerned about her tax burden once she began drawing down her assets in retirement. Naturally, she wanted to minimize her tax expense but was unsure how to do it. We showed her how to tap into her savings and investments in the most tax-efficient sequence. For example, we discussed how to optimize withdrawals from her taxable, tax-deferred, and tax-free accounts in light of the required minimum distributions from her retirement accounts, her small pension from work, her accumulated employer stock, and her Social Security benefits.

Hand putting Coins in glass jar with retro alarm clock for time to money saving for retirement concept

Janice’s Solutions

As Janice became more comfortable with her retirement plan, we recommended several actions to turn her dreams into reality, including:

  1. Roth IRA conversion: Janice began transferring her 401(k) assets to her Roth IRA in yearly installments. This allowed her to pay off taxes while she was still working (and taking 401(k) deductions on her annual contributions) without driving her into a higher tax bracket. Her Roth nest egg assured her of tax-free income that she could tap at her own pace without regard to required minimum distributions.
  1. Single-Person 401(k): Near her 65th birthday, Janice opened a Single-Person (or Solo) 401(k) to accept contributions she expected to make from her part-time work earnings. This account allowed her to deduct her Solo 401(k) contributions while distributing Roth IRA funds tax-free.
  2. Investments: We revamped Janice’s investment portfolio to increase its diversification and reduce her highly concentrated position in company stock. Based on her income needs, taxes, inflation, and life expectancy, we drew up the optimal asset allocations for a broad array of investments (including stocks, bonds, REITs, ETFs, mutual funds, and other assets). We also established a portfolio management schedule of how the allocations would evolve over time. Her portfolio became much less risky without sacrificing expected returns. It is now tax-efficient, low-cost, and easy to rebalance periodically.
  1. Insurance: We helped Janice revise and expand her use of insurance and annuities to produce risk-free income for her retirement. We showed her how she could deduct her long-term care policy premiums when she became a self-employed contractor. 
  2. Estate planning: Janice wanted assurance that her wealth would be distributed according to her wishes when she died. We set up an estate plan that included her will, power of attorney instructions, and trusts for her grandchildren.


Janice’s Results

Janice retired last year at age 65, just like we planned 10 years ago. I was happy to be a part of her successful transition from full-time professional to a retiree with the means to live her best life and participate in the activities that mean the most to her.


Contact Us to Start Planning Your Future


lighthouse in New Haven

If you’re thinking about consulting a registered investment advisor in Connecticut, we’d be delighted to meet with you. We’ll work with you to put together personalized, realistic projections of what your Social Security and finances will be like in retirement. 

Ready for a change in financial advisors?  It’s easy to get a second opinion in the New Haven area. Here’s a quick guide that describes why and how to switch financial advisors.

Heritage Capital is a Fee-Only Fiduciary, so we always put Janice’s interests and goals first. We can do the same for you, and I invite you to contact us today. At Heritage Capital you can “Invest for Tomorrow. Live for Today. ™”  

Click here to download our free eBook, “Understanding Social Security: 6 Ways People Usually Get it Wrong”.


Paul Schatz, President, Heritage Capital