Meet Karen and Michael. They have two young daughters and recently upsized their home.
Karen and Michael were referred to us after sharing their need for financial expertise. They were renting their first home but wanted to sell and invest the proceeds. Karen has a secure corporate job and Michael is a successful freelance writer. They had significant savings, in part to compensate for Michael’s irregular income. They felt they were behind on retirement and saving for their girls’ educations.
Integras Analysis
We agreed that there was more than enough in savings to cover Michael’s unpredictable income and that they could direct some excess cash and discretionary income to investments. Karen’s employer offers great health and disability benefits but the life insurance is expensive. We compare coverage from almost all major carriers and guide clients through the application and approval process. After reviewing income, expenses and objectives we crafted a comfortable plan to help them reach their goals.
Recommendations
- Sell the first house and increase Karen’s retirement contributions
- Pay off car loans and contribute to Roth IRAs
- Establish a high-yield online savings account with automatic drafts for mortgage, car loans & investments
- 529 accounts for the girls with initial investments and monthly contributions. In Georgia, the Path2College plan offers state tax deductions on the first $4,000 per child, per year
- Set up term life insurance
Results
- Karen increased her retirement contributions to the deductible maximum (currently $19,500)
- The girls’ 529 accounts are growing tax-deferred and distributions for education (limited to $10,000 annually for private K-12) are tax-free!
- Term insurance is the best way to replace anticipated income and if you’re healthy, individual policies are usually significantly cheaper than employer options
