John Robertson is a project leader at Manitowoc Tool, where he’s been employed for over thirty years. He’s been married to Tammy for nearly thirty five years, and all three of their kids are grown and married.
John made just over $100,000 a year, and owned a good amount of Manitowoc Tools common stock. He received dividends from Manitowoc Tools of around $10,000 a year.
His 401(k) at Manitowoc Tools was worth over $1.5 million, and his projected pension benefit was $715,000. He thought he was going to take the pension in lump sum when he retires, but he wasn’t sure.
John planned on celebrating his 62nd birthday by retiring. It got him wondering if he had done enough to maintain his lifestyle in retirement.
He visited with a few other financial firms, but wasn’t sure if he was “getting it straight” from them.
John Gets Started
John filled out Annex Wealth Management’s online form. We called him to set up a time and place to meet, told him what sorts of information we’d be asking at our first meeting, and had him take our online risk assessment.
A few days later, we met with John at our Mequon Branch Office. We talked for a while, asking him many questions about his current situation.
John admitted that, as an engineer, he was prone to overthinking (something you’d expect from an engineer). His risk profile reflected his mindset – our survey results showed him as a moderate growth investor.
John looked forward to our next meeting, where we’d give him our review, including a retirement analysis which would look into both his portfolio and Social Security.
The Information And Power To Make Your Own Decision
Just a few weeks later, we met again. This time, John brought Tammy with him.
One of the biggest parts of our discussion centered on the Net Unrealized Appreciation strategy, an approach we thought had some merit considering the high amount of Manitowoc Tool common stock he held.
In short – the strategy noted the potential to pay lower capital gains rates than the ordinary income tax on the cost basis amount they would pay; and the potential to further diversity his portfolio for better liquidity and flexibility, which could possibly delay Social Security to potentially get a greater Social Security benefit for the Robertsons.
John had all sorts of questions about NUA – and admitted the other advisors he spoke with had not even mentioned the term to him.
We walked through many different scenarios with John, sometimes including Mandy, our lead tax specialist who has both a CPA and a CERTIFIED FINANCIAL PLANNER™ certification.
After John asked, reflected, and reviewed his options, he finally decided on a direct rollover into an IRA instead of NUA.
With his consent, we made the phone call to the custodian and his Manitowoc Tool position was sold and moved into an IRA.
John loves retirement, and was grateful that he was given thoughtful strategies with no pressure to buy anything. We gave John the space and information he needed to decide – and in doing so, we were able to build the trust he was looking for.
The Case Study is hypothetical in nature, for illustrative purposes only, and should not be considered investment advice. The information is intended to illustrate services available at Annex Wealth Management, and is not intended as a testimonial or endorsement of Annex Wealth Management as an investment advisor. The Case Study does not necessarily represent the experiences of other clients, does not reflect actual investment results, nor is a guarantee of future results. The investment strategies discussed are not appropriate for every investor and do not take into consideration any actual client’s investment objectives or financial needs. Clients should review with their Annex Wealth Management Wealth Manager the terms, conditions and risks involved with specific services and products.