Redwood Case Study:
Already Retired
Meet Michael & Sue
In their late 60s, Michael and Sue have both recently retired. Unfortunately, their transition to retirement coincided with some less-than ideal market conditions. Stocks were down, interest rates were rising fast, and inflation was high.
While their portfolio value looked good on paper, their financial plan was nonexistent. Their previous advisor never talked with Michael and Sue about cash flow planning or the importance of a retirement investment strategy.
Until they came to us, their retirement had no structure, tax plan, or safety net.
Create a comprehensive plan that aligns with their retirement lifestyle & legacy goals
Manage risk and create a cash reserve to provide some income stability and cover their day-to-day needs efficiently
Leverage other income sources and delay Social Security to increase future benefits
Simplify and rebalance investments after a tough market year
Michael & Sue’s 4 Key Questions
We have a large amount of company stock. How do we sell and bring better balance to our portfolio without taking a massive tax hit?
What’s the best way to build a reliable retirement paycheck from what we’ve saved?
Should we take Social Security now, or is it worth waiting until we’re 70?
How can we turn our investments into a legacy, without sacrificing the lifestyle we want now?
How We Helped
When we first asked Michael and Sue what their plan was, they confessed they didn’t have one. While everything was going okay for now, they knew they couldn’t remain successfully retired without a roadmap.
So, we rolled up our sleeves and built one based on the unique goals and concerns they shared with us during our few initial discussions.
Cash Flow Planning (Spend Bucket):
We built a detailed cash flow model based on Michael and Sue’s existing resources. Having this customized, yet flexible model to guide our next moves made them feel more assured and confident in their decision-making. Michael and Sue were thrilled to see they could use other income sources early on in retirement, allowing them to delay their Social Security benefits to increase future monthly income and help with taxes.Income, Stock, & Social Security Strategy (Grow Bucket):
As the stock market recovered, we worked with their CPA to design a phased, tax-focused exit strategy to gradually diversified their holdings and fund their short-term Spend bucket. We also established a plan for their IRA assets, stock sales, and future Social Security income.Lifestyle & Legacy Alignment (Secure Bucket):
We reviewed and organized all investment assets, enabling us to strategically offload poor-performing ETFs, providing Michael and Sue with a year’s worth of cash flow. We also sold an old rental property and used the equity to provide ongoing income via a covered call strategy. With all adjustments in place, we were able to fund 529 plans for their 3 grandchildren—fulfilling a long-time desire for Michael and Sue.
The Outcome
- Michael & Sue’s concentrated stock exposure is being reduced tax-efficiently
- They have cash reserves, income streams, and a defined timeline for key decisions
- Their retirement accounts are aligned and positioned for long-term legacy growth
Because we took the time to listen and plan, Michael and Sue feel confident in their ability to continue enjoying retirement and establishing a legacy for their children and grandchildren.
With a purpose-driven plan in place, they’ve moved away from uncertainty and guesswork and now make decisions feeling secure in their financial well-being.
