Meet Craig and Joan
Age: 38 / 35
Occupation: Software Designer and Pediatrician
Craig and Joan are dual-income working professionals. They have both worked hard and advanced in their careers. Both earn strong incomes which will allow them to save for important events in the future: college educations, weddings, a vacation home, retirement and more. They also have a full-time second job, taking care of their two children, Nick and Bailey, ages 11 and 8.
Craig and Joan Know That They Should...
Be making the right financial decisions to maximize their savings and reach their long-term goals.
Address their financial “to-do” list:
- Establish a will
- Maintain the proper life insurance
- Develop tax-efficient savings plans for their children’s education
- Make the right investment decisions with their 401(k)’s and take advantage of other tax deferred savings vehicles
They work full-time jobs during the week, and their weekends are spent at soccer games, birthday parties and gymnastics.
With their busy schedules and demanding careers, they don’t have the time to focus on these issues, and they aren’t sure if the decisions they made in the past were the right ones.
Preparing for Future Expenses
Craig and Joan are also looking to move out of their first home and into an upgraded new house. Since they anticipate their new home will be more expensive, they want to make sure they use the right broker and, more importantly, get the right home mortgage to finance their dream home and they want do it in the way that is most advantageous to them.
How Did We Help?
Sterneck Capital reviewed Craig and Joan’s full financial picture including their mortgage needs, insurance needs and estate needs. We allocated their investments according to their risk tolerance and long-term goals. We found that they were previously taking too little risk, given their income and time horizon, and that their projected wealth was dramatically increased by getting them invested appropriately.
We found their 401(k)s were not allocated properly for a couple their age. A more aggressive allocation would mean greater likelihood of substantially larger assets when they retire. We also found that they were not taking advantage of additional opportunities to grow tax deferred income for retirement, including an IRA and HSA.
We found that although they had been saving for their children’s education, they were missing out on the upside provided by a tax deferred 529 College Savings Plan. We projected future contributions and growth to determine the right amount for them to set aside each month to to provide the necessary resources for their children’s higher education.
Sterneck is the quarterback for Craig and Jane’s financial life. We ensure they are making the right decisions about their careers and investments. We know their goals and aspirations and have put them on the path to get there. We are their financial partner on the path of life, their personal CFO.
Life insurance needs were being partially met through Craig’s employer. However, a review showed shortcomings in the amount provided. We presented a scenario where, in five years, Craig left his job for another which didn’t offer life insurance and how a similar policy would become much more costly. We found the right policy for Craig and Joan to meet their needs. Since we are a fiduciary, they were certain the advice we were giving was what was best for them not best for the insurance broker.
As job offers arose, or new benefits became available, we offered our guidance in helping Craig and Joan understand the pro’s and con’s of each career move they considered.
We were able to assess how much they should spend on their new home, and we were able to connect them with our partners in real estate and mortgage to make sure they did the right transaction for them. Sterneck Capital served as a trusted partner and sounding board as they went through the negotiation and escrow process.
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Case Study Clients are composite representations of actual clients. Case studies are intended to illustrate the range of services we provide but do not represent actual services provided to these fictional composites.