Case Study

Brian and Kate both do well. They have a household income of $275k, they each contribute to their 401(k)s, have life insurance through work, and their only debt is the mortgage on the house and a small car loan. They’ve managed to stash away some savings and want to know what to do with it. They also have a nagging feeling they should be able to save more and want to better understand where their money goes. They want to start saving for college, make sure their accounts are invested properly, and make sure they’re not missing anything.

To start, we had Brian and Kate link all their accounts to our financial planning software, RightCapital. We built a balance sheet to see where they currently stood and a cash flow statement to better understand their monthly income and expenses. We recommended Brian and Kate carve out a portion of their savings and keep it as an emergency fund.

We determined that, in a normal month, the Gerrard’s have a monthly cash surplus of $2,300.

We then analyzed Brian and Kate’s full financial picture and collaborated on a plan for how to best allocate their savings and excess income.

We identified 4 key areas of focus based on their goals, priorities, and concerns.

College Savings: We decided to set up 529 college savings accounts and used the remaining savings to kickstart the accounts. We then set up each account with a recurring monthly deposit of $250. Brian and Kate are now on track to fully pay for each of the kid’s in-state public education or 40% of their private tuition.

Retirement Savings: We recommended they consolidate their old 401(k)s, update their investment selections, and have Brian increase his contribution by $500 per month to max out his 401(k). Based on the retirement goals Brian and Kate outlined, these steps reduced their taxable income and improved their retirement score from 74% to 82%.

Insurance: We determined Brian and Kate were underinsured in several areas. We helped them each secure $1.5M of term life insurance – which cost a total of $250 per month. We also had them increase their homeowners insurance to be fully insured and recommended they purchase an umbrella policy as additional liability protection. We also reviewed their workplace benefits and recommended that Brian opt in for the disability coverage at his company’s next open enrollment.

All the small things: Brian and Kate didn’t have a Will or other essential estate planning documents. We walked them through the importance of these documents, discussed the roles they need to think about, and put them in contact with a local estate planning attorney. We consolidated and diversified two old investment accounts and determined this money would be additional long-term savings. We recommended Brian contribute $200 per month to his Health Savings Account (HSA), reviewed his employer stock option plan, and had Brian and Kate set up an additional savings account to sweep money each month for their annual vacation.

Navwell Advisors took the time to really understand Brian and Kate’s financial needs. We worked together to create a comprehensive financial plan that delivers value where they need it most.

Clarity: Brian and Kate now understand where their money goes and feel in control of their spending. Their accounts have been consolidated, cleaned up and given purpose. They’ve created shared goals and have a clear vision of what the future looks like.

Confidence: Brian and Kate love their new sense of confidence. Their investments are being professionally managed, their family is protected, and they feel like they’re in the driver’s seat – with an unbiased accountability partner helping them get to where they need to go.