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The following is a hypothetical financial planning scenario presented for illustrative purposes only. It should not be construed as an investment recommendation or solicitation. Please consult an advisor to discuss your individual situation prior to making any investment decision. The rates of return do not represent any actual investment and cannot be guaranteed. Any investment involves potential loss of principal.

Are you nearing retirement age (50-60 years old) and aren’t sure if you’re ever going to be able to stop working? It is happening to Americans across the nation. Investments like real estate or mutual funds are not performing the way you’d hoped due to swings in the economy in the last ten years.

While the stock market, economy, and political climate play a role in retirement readiness, there are financial professionals like Shanna Tingom at Heritage Financial Strategies that can help you plan for fluctuations so they don’t destroy your retirement dreams.

Take Joanne and Robert as an example.

Nearing retirement in ArizonaThey were married right out of college and had their oldest child a year later. Robert entered the MBA program at the local state university with hope of increasing his income with the additional degree. The plan worked and Joanne was able to stay home and care for their growing family.

Robert was promoted several times and they were able to purchase a home. They settled in to life with two kids under the age of five. It was a crazy time in their lives. From a financial perspective, they thought they were doing well. They counted on their home value as part of a retirement plan and purchased health and life insurance through Robert’s employer.

While they understood the value of saving for retirement, they never fully took advantage of Robert’s employer sponsored retirement plan. They always thought they’d have time to save.

They were young and in love, eventually having four children in eight years.

As the children got older, Joanne and Robert assumed the children would attend the state university where they had met and fallen in love. Their children had other ideas.

Three of the four financed private college tuition with their parents as co-signers on their student loans. When their second child defaulted on her loans, it was Joanne and Robert who had to pay to save their credit rating. That had never been part of their financial plan. In fact, they were counting on saving that money for their own retirement. After all, their money can only go so far

Then came weddings, grandchildren, and grown children moving back home.

When their youngest child decided to pursue a career in music, they allowed him to live with them. The deal was for a year. It has been five years and there’s no sign of their son leaving home or enrolling in college as he’d promised. Robert is quick to point out their son doesn’t pay rent and Joanne’s retail job pays for their son’s expenses.

Robert and Joanne would love to sell the big family home, move to a 55+ community, and stop working but they don’t know if it’s possible from a financial perspective. They call their financial professional who makes a number of recommendations including:

  • Give their son a timeline of when he needs to move out of the house and stop paying his bills.
  • Make an appointment to review all investment accounts including the employer-sponsored 401k. Rebalance accounts according to their updated financial plan.
  • Call a real estate professional for a home evaluation.
  • Visit a credit repair agency to review credit and repair as needed.
  • Get pre-approval for a mortgage on a home in a 55+ community.
  • Review insurance including health, life, and long-term care.
  • Make an appointment with an estate planning attorney to complete wills and trusts.
  • Maximize employer-sponsored retirement plan then look at other options for tax and retirement savings.
  • Create a personal budget….and stick to it.

As they worked through their extensive to do list, they realize they need to establish financial boundaries with their children, especially the youngest, while creating a financial plan for themselves that includes savings, insurance, and an estate plan.

They decide they need to wait to sell their family home and opt to rent it to a young, growing family for at least a year. The rent is more than the mortgage owed so they put the excess toward debt payoff and move into a one bedroom apartment. They are able to live almost exclusively off Joanne’s income, using Robert’s to pay down debt and save for their future.

Within 18 months they’re able to sell the family home. Proceeds from the sale are used to pay off their cars and fund savings. They estimate they will be able to purchase a modest retirement home for cash and fully retire in ten years or less. For now, they’re enjoying weekend daytrips and time with the grandchildren.

Shanna Tingom uses clear guidance from financial planning and investment management strategies to help you, as her client, achieve your financial goals. The principles she utilizes have been studied by Vanguard with their Advisor’s Alpha research and have been demonstrated to be an effective method to save clients time while adding value.

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